A basic “pattern” in trading crypto (or other investments) is a shape with certain characteristics that appears on price charts and indicate a predicable move in price.
A common example that most traders quickly become familiar with is the “head and shoulders” pattern (HS) . The name says it all as you can see in the pic above.
Over time, patterns have emerged that allow you to predict what happens to price after a HS pattern occurs that gives traders a tradeable “target”. For example, the head and shoulders pattern typically anticipates a bearish result (drop in price):
If a price chart shows buying and selling patterns, and the HS pattern = bearish result, it should make sense that in “inverse” head and shoulders (IHS) = bullish result, right?
NOTE: subscribers to cryptopatterns newsletter are often shown “volume” patterns in addition to price patterns and you can see an example in this chart – volume typically spikes on breakout of an IHS. That’s an example of “confirming a pattern”
REAL TIME BITCOIN PATTERN AND TARGET ANALYSIS
So can simple patterns on charts be a better predictor of moves in price than the latest crypto news about “halvenings”, miners squabbling about segwit, reddit bitcoin gurus predicting BTC 100000 while mocking altcoins and Goldman Sach’s discovering bitcoin and now sharing expert views?
Yes. Though don’t take that to mean the patterns always work–because nothing always works. But let’s go to the charts and see what the patterns and targets have to say about what’s next for BTC
Notice, the price pattern by itself wasn’t enough to analyze the chart. cryptopatterns is always saying “volume doesn’t lie” and on the first breakout of the IHS Bitcoin didn’t have the volume,, and back price came. Now we have a breakout with volume.
SO WHAT’S THE TARGET PRICE FROM THIS IHS PATTERN?
Traders are taught that the target for an IHS is = the distance between the head and the neckline, so here’s what that looks like in the case of our real time BTC trade:
Targets can change based on where traders draw their lines so they are only approximations, but they can give you a “target range” that can be very useful for trading.
IS TRADING PATTERNS THAT SIMPLE?
Is BTC heading for $2880? What about that article today saying BTC has no future? More importantly what patterns and indicators can emerge that can confirm the target is likely to fail or be reached, or perhaps skyrocket past it (which BTC did multiple times from $850-2900)?
Obviously, there’s no guarantee BTC will reach $2800 because of a certain shape on a chart (there are many more patterns than HS and IHS). If it were guaranteed. 90+% of traders would be making money instead of losing it which is what is really happening out there (not just in crypto–in all asset trading).
EXTRA CREDIT: Study the LTC charts from the last few days to see if you can now see how cryptopatterns identified Litecoins breakout move.
But for answers to how gain an edge in knowing where BTC is heading so you can invest in, trade, or just understand the BTC and Altcoin markets better, studying patterns and targets is essential for a trader who wants long term success. We also believe subscribing to cryptopatterns newsletter can be a helpful (and profitable?) part of your studying, as there is far more to the pattern and target story than most ever dreamed possible.
This site is for informational and entertainment purposes only and not in any way intended to be investment or trading advice. You are 100% responsible for your financial decisions at all times. It is highly recommended you DO NOT make any investment or trading decisions depending upon what you read on this blog/newsletter! All information presented (c) 2017 JBP cons, inc. All rights reserved.