Understanding crypto market trends is absolutely essential for successful trading. There is an old trader’s saying stating that “the trend is your friend” and this holds true for crypto markets as well as any.
To put it simply – the trend is the way the market is moving in a certain time-frame. However, markets don’t usually move in straight lines. They move in zigzags, in waves of peaks and bottoms.
The direction of these peaks and bottoms is what defines a trend. When a series of successively higher or lower bottoms is formed on a certain cryptocurrency, we can say that a trend is forming.
Three types of crypto market trends
There are three types of trends. The first two are obvious – an uptrend and a downtrend. However, the third one is called sideways. Some also call it a trendless trend.
It is important to note that most technical analysis tools work best in either uptrends or downtrends. They are much less reliable in a sideways trading environment. Such trading situations can be very dangerous for your bankroll. Staying out of a sideways markets is often the best idea.
Time-frames of crypto market trends
The crucial thing for understanding and assessing crypto market trends are the time frames. As mentioned, trends consist of smaller waves of tops and bottoms. But if one would look even closer, these smaller waves also have sub-waves. There is thus as many trends as time frames. However, we can categorize them as major, intermediate and near term trends.
In crypto, market cycles are much faster than in traditional markets. There, trends can last for years or even decades. In crypto, on the other hand, you can describe a major trend as only lasting a couple of months.
It is thus hard to say what a market trend is for a certain cryptocurrency. It all depends on the time frame. If you do day trading, think twice when trying to counter trade the intermediate or major trends. However, if you go for long-term trades, do not heed smaller time frame movements.
Read Full Article: www.cryptotradeacade...rypto-market-trends/
To put it simply – the trend is the way the market is moving in a certain time-frame. However, markets don’t usually move in straight lines. They move in zigzags, in waves of peaks and bottoms.
The direction of these peaks and bottoms is what defines a trend. When a series of successively higher or lower bottoms is formed on a certain cryptocurrency, we can say that a trend is forming.
Three types of crypto market trends
There are three types of trends. The first two are obvious – an uptrend and a downtrend. However, the third one is called sideways. Some also call it a trendless trend.
It is important to note that most technical analysis tools work best in either uptrends or downtrends. They are much less reliable in a sideways trading environment. Such trading situations can be very dangerous for your bankroll. Staying out of a sideways markets is often the best idea.
Time-frames of crypto market trends
The crucial thing for understanding and assessing crypto market trends are the time frames. As mentioned, trends consist of smaller waves of tops and bottoms. But if one would look even closer, these smaller waves also have sub-waves. There is thus as many trends as time frames. However, we can categorize them as major, intermediate and near term trends.
In crypto, market cycles are much faster than in traditional markets. There, trends can last for years or even decades. In crypto, on the other hand, you can describe a major trend as only lasting a couple of months.
It is thus hard to say what a market trend is for a certain cryptocurrency. It all depends on the time frame. If you do day trading, think twice when trying to counter trade the intermediate or major trends. However, if you go for long-term trades, do not heed smaller time frame movements.
Read Full Article: www.cryptotradeacade...rypto-market-trends/