Like FX, virtual currency is a market in which many professional traders are active. We have compiled an article about the pennant, which is a consolidation pattern that often appears on the chart, so if you are aiming to become a trader, you may want to refer to it.
What is a pennant?
A pennant is a tendency that appears after a market moves violently in an up-and-down trend. This will cause the market to gradually converge and gradually shift to a range market. In this market, price movements are gradually becoming quieter, so large price movements cannot be expected. This state of formation is called a pennant. You need to understand and perceive the movement and direction of crypto asset prices, coin market and news information by yourself through technical analysis. Cryptocurrencies usually show a trend, whether it’s down or up.
Source : Tradingview BTC/USD 1hour leg 07-2023
A rising pennant occurs during an uptrend, and a falling pennant occurs during a downtrend. This triangular holding of pennants is basically said to be a trend continuation chart pattern, and when this shape occurs, it is said that the trend will continue. Pay attention to the hourly trend line. Basically, a rising pennant will have a long chart trending upwards at the high price (top price), and a falling pennant will have a reverse chart trending downwards from the low price. You can use tools to determine differences, conversions, etc.
nature of the market
Before talking about pennants, you must also know the market. This is the same for Forex, cryptocurrencies, and stocks, but the market consists of contraction, spread, and direction. In the case of a pennant, it is a chart pattern that shows when a direction ends and transitions to contraction.
contraction
The contraction period indicates a range market. This is a market that simply moves up and down between fixed upper and lower limits. This market corresponds to a period of accumulation to determine the next direction. After this, the market price will gradually become more volatile and will enter a period of dispersion. The point is that if you break out of the resistance, it will move all at once. Please be careful as there are cases where it returns midway.
Source : Tradingview BTC/USD 1hour leg 07-2023
diffusion
Diffusion ends the range market, and the price movement gradually begins to become rough. Gradually start swinging up and down, and eventually the next direction will come out. In the case of a trend follower, it can be said that this is the timing to enter by predicting whether it will go up or down at this timing.
Source : Tradingview BTC/USD 1hour leg 07-2023
direction
When the spread ends, a trend occurs and violent price movements occur. For traders, this is the direction of the market where they can aim for the widest price range. This is the time when you can aim for the biggest profits, so it’s the time to take the plunge. In terms of development, the recent price movements are the biggest at important times when investors can make the most money, which can also serve as a sign.
Source : Tradingview BTC/USD 1hour leg 07-2023
Open an account
In order to actually start investing, you must first open an account. MEXC allows you to open an account for free, so you can easily open an account. The article below explains how to open an account, so please refer to it.
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