Bitcoin Chart Patterns - How to Trade Bitcoin Patterns

Bitcoin Chart patterns are graphical representations of repeating price action formations that are commonly used in the analyzing of online Bitcoin market.

Chart patterns is one of the studies used in trading analysis to help traders learn how to recognize the repeating chart formations.

These chart patterns are important in Bitcoin Crypto Currency trading because when the market is not heading in a particular direction it is forming a chart pattern. It is important to know these formations so as to have an idea of what might be the next likely move in the Bitcoin price movement.

When Bitcoin price movements are plotted on a chart there are several patterns that occur naturally & repeat themselves over & over again. These formations are used by a lot of technical analyst traders to predict the next likely market movement.

Traders often analyze these chart patterns and patterns to measure supply & demand forces which form the basis for Bitcoin price fluctuations.

These patterns are classified in to 3 different categories:

1. Reversal patternsDouble tops, Double bottoms, Head and shoulders & Reverse Head and Shoulders

2. Continuation chart patterns Ascending triangle, Descending triangle, Bull flag/pennant, Bear flag/pennant

3. Bilateral patternsSymmetric triangle - Consolidation and Rectangle - Range Market

Reversal chart patterns - these reversal patterns confirm the reversal of the price trend once the chart setup is confirmed. These patterns are formed after extended price trend either upward or downwards and they signal that the market is ready to reverse the direction.

Continuation patterns - these continuation chart patterns are formations that set up the market for a continuation move in direction of the prior market trend. These continuation chart patterns are formed when the market is taking a break before continuing moving in the same direction of the prior Bitcoin prices trend.

Consolidation chart patterns - these consolidation chart patterns form when the market is taking a break before deciding the next market trend direction to take. When these chart patterns are formed the market is trying to decide which direction to trade.

Technical Analysis of Charts

There are two types of chart analysis, these two might seem similar but are not: the two are:

Japanese Bitcoin Trading Candles Patterns - Study of a single candle - Read Japanese CandlesticksChart Patterns - Study of a series of candlesticks formations

(This tutorial is about the second option above - chart patterns)

The different tutorials for these two types of chart analysis are: