Understanding the patterns: a guide for neophyte traders
When it comes to market crashes, there are two types of people: those who panic and those who jump around saying “YES! Another dip!”. This happens because one understands the pattern or market trend, and the other only knows either the market rises or falls. To tell frankly, the latter is the worst kind of trader you could ever encounter.
Before you sign up for a cryptocurrency platform, we are always asked to remind ourselves that cryptocurrencies are volatile, and we must first DYOR before engaging in it. It’s like a gamble when not played right but could be a wise investment when you know what you are doing.
Before engaging in cryptos, one must first understand how the market moves, and we can know this through chart patterns laid before us by early cryptocurrency startups. We can harness them to guide us in deciding whether to invest or not.
It must always be stressed that we must not only blindly put our hard-earned money without any background of what we are entering with, or else we could lose them completely.
Also Read: Ask the Orb: The importance of D.Y.O.R.
Pattern analysis: resistance and support
Finding the Resistance and Support in a chart is an essential skill a trader must have to have a basic understanding of cryptocurrencies. In layman’s terms, resistance is the highest price a market cannot surpass upon several tries; it can be compared to a ceiling. On the other hand, a support can be compared to the floor, where a market price will never go below.
The two concepts serve as the barrier that the price cannot overcome. They are a good indicator of how the market will move or how it will behave in the future. That is why it is essential that you first master these concepts before investing your money.
There is a simple way of spotting resistance and support lines. All you need to do is to spot a seemingly unbreakable price ceiling and price floors, and you are good.
However, while it can be easy to spot them, using them in different chart patterns could be tricky, and it could be a problem for neophyte traders.
But, the more advanced market chart reading is for those day traders who do not simply hodl. They are those who do crypto as a full-time job and not as an investment alone. It requires expertise and dedication to patiently analyze the market on a day-to-day basis.
Luckily, for those who wanted to buy and hodl, there is a simple solution; we zoom out the chart and look for the support level. This is a great indicator to see to it that the price of a token can soar in the future, especially if the market price is still dancing at the floor level. A great example would be cryptocurrency projects such as in CARDANO and SHIBA INU:
In the case of ADA, it spent years on this floor price (red) before soaring to the moon, and for SHIBA INU, a similar pattern was also seen.
That is why, upon Doing Your Own Research and you stumbled upon this kind of trend, where it seems that when you zoom out the price chart of a cryptocurrency project and the price moves laterally and is stable, that should be one of your primary considerations before investing.
This is because you can simply imply that the only way is up and nowhere else when the price is still low and on the support level.
PrivacySwap’s Chart Analysis
Upon learning what support and resistance levels are, looking at PrivacySwap’s chart will never be the same. It seems like it has already settled into its support level and follows a pattern similar to Cardano when you analyze it.
With this, we can infer that it is the best time to buy more PRV2 and PRVG now while the prices are low and still on their support levels, for it is bound to soar up soon. It is only a matter of time and control over the urge to sell prematurely to gain exponential profits from PrivacySwap.
Reading patterns and knowing the basics of trading should be something that you should learn first before investing your money in this very volatile industry. Before I had a working knowledge about crypto, I’ve read first every article I could read, watched tutorials on YouTube, and traded small amounts until I perfected it. In my four years of experience, 3 of which were for getting to know it.
It took me a while to understand how cryptocurrency behaves. I also had my frustrations upon having impermanent losses and I almost gave up because of my losses upon buying highs and selling lows. But I recovered due to the knowledge I acquired because of that experience.
This is why it is crucial to DYOR first and learn the basics in crypto because you will not be lost along the way when you do so.