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Technical evaluation: Using graphics to make cryptocurrency decisions
In the world of cryptocurrency, they have experienced rapid growth and volatility over the years. As a result, merchants and investors have turned to technical analysis, as made informed decisions on market management. Technical evaluation includes the use of graphs, indicators and other visual devices to analyze price movements and standards to predict future trends.
What is the technical evaluation?
Technical evaluation is a method that is due to the past performance of safety or active value, not based on its internal value, based on basic analysis. This requires analysis of data, graphs and historical standards to identify trends, support, resistance and other levels that can be used to make well -founded decisions.
How to use diagrams in technical evaluation
The graphs are the basis for the technical evaluation of the cryptocurrency. They provide visual representation of price movements over time, allowing merchants and investors to analyze standards, trends and other market resources.
Here are some methods to use diagrams in technical evaluation:
- identify support and resistance levels : Graphics can help identify support and resistance areas where prices usually jump back or paralyze.
- Analysis of the amount of negotiation : High negotiation quantity usually indicates a strong purchase pressure, while low quantity may suggest weak sales pressure.
- Find patterns and trends : Identify repeated patterns and trends in the diagram, such as triangles, wedges, and head and shoulder formations.
- Use indicators : Indicators such as mobile averages (today), relative strength index (RSI), Bollinger bands and others can provide additional information about price movements and help identify potential support areas or resistance.
Popular graphic patterns in cryptocurrency
Here are some popular graphic patterns used by merchants and investors for decision -making:
- Triangle Standard : The triangle is a general pattern in which prices form a small area to the range before they remain higher.
- Head and shoulder formation : The head and shoulder formation occurs when the price reaches the lower point, forming a “head” and then jumps back on the “shoulder”.
- Heads : The wedges are similar to the triangles, but they have two separate sides: a small area that has a track (the “body”) and a larger ribbon.
- Crossovers : Baptisms occur when the security price goes through another security, indicating many possible changes in market dynamics.
Cryptocurrency Indicators
The indicators are mathematical calculations that promote analysis of price movements and identify possible trends or standards. Some popular indicators used during the technical evaluation are as follows:
- Mobile average (today) : A moving average is a line that represents the average value of security over time.
- Relative Strength Index (RSI) : RSI measures the size of recent price changes to determine excessive or overdose conditions.
- Bollinger Bars : Bollinger bands are a variation of pattern to display volatility and identify potential trends.
Tips to use cryptocurrency diagrams
Here are some tips for effective use of charts during the technical evaluation:
- Diversify graphs
: Use more graphics to analyze different markets or asset classes.
- Combine diagrams with basic analysis : Combine technical analyzes and basic analyzes to comprehensively understand the market.
- Keep up -to -date : Keep graphics up to date as new data and events can affect market management.
- Be sick : Technical evaluation is not accurate science; Be patient and give the graphs time to maturity before making decisions.