If you are a trader, you know that it’s always an important question for a successful purchase. The Crypto currency Markets has major differences with markets like Forex . In the markets like Forex, there is always enough buyer and seller, and the price movement is not fixed . But in the Crypto market, the volume of trading of many altcoins sometimes achieve to less than one Bitcoin within 24 hours. And it makes the fix prices and the quick movement of the Bitcoin price may cause the price to drop quickly.
So what is the solution?
The solution is that you just have to make your purchase when the price movement has started upward, and you’ve come to the conclusion that the downtrend has ended.
How can we be sure that the Downward trend has ended?
In fact there is no standard and permanent method for this issue . And also the end of the downtrend depends entirely on the amount of profit you desire . If you analyze a low frame rate (30 minutes down), you can regularly see a downside or upside down breakdown. in the lower timeframes , you are often looking for low profits, and you’re quickly entering and leaving a trade . For this reason, our recommendation in this market is to analyze the time frames above one hour .
In the above timeframes , there are various ways to diagnose the ending of the downside, which are briefly introduced.
– Trend line long term
One of the most widely used methods is to use this method . To do this, you will be logged in to a market where the downtrend Trend is broken. You can use famous techniques such as John Murphy to draw Trend lines.
– Long length moving average
Another method is to use a moving average with a long period of time . To do this, you need to check each coin separately and see which period has the most reaction for it. For example, in many coins , the moving average of the 200 period is very effective in the 4 hour period, and it has many reactions. In this way, you only enter into a deal when the price reaches the top of the long moving average.
– Exponential Moving Average
Given the logical property of this indicator, momentary and cross-sectional fluctuations can not have much effect on it. One of the best ways to detect the end of the downtrend is to use this indicator and in the time frame of the daily. For this purpose, in the timeline of the daily frame, whenever EMA7> EMA21 can be somewhat sure that the downtrend is likely to end.
– Using ichimoku cloud
The Ichimoku Cloud, also known as Ichimoku Kinko Hyo, is a versatile indicator that defines support and resistance, identifies trend direction, gauges momentum and provides trading signals.
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