Hi crypto-traders !
I am creating a bible where you can find a lot of pattern used by the traders to make their TA. I will try to update it as fast as it is possible. One pattern every day - week, depending the time I have to work on it.
For this first chapter, I will explain you the basis --> Supports & Resistances.
What are the supports?
Supports are zones where the price bounce, and don't go lower.
A chart is better than 1000 words :
Here you can see the chart of XZC (ZCoin) is bouncing on the 0.0016 - 0.0020 area. This is called a support. A good entry point would be the green box, the bottom of the support with a stop loss at the red area.
What are the resistances?
Resistances are zones where the price bounce, and don't go higher.
We can clearly see that the price can't go through the 0.0070 - 0.0075 area and is pull back every time.
Resistances can be good levels to take a partial profit.
One more thing : resistances can turn in support if the price rise up and then pull back on the support area.
In 7 months, the price bounced 2 times on the resistance, when the price rised up, it turned into a support, it bounced again 5 times on it.
The good entry point was the green box, and then a partial take profit in the red area.
If you followed this plan, this was a 212% profit.
This is THE most important pattern in trading. You don't need 50.000 indicators and 50.000 trend lines on your chart.
Keep it simple !
Thanks for reading.