There is usually a pattern of trading in "slow" markets such as the stock market, and many crypto traders also use formation trading. Again, it's usually a "slow" large crypto market.
Pattern trading is closely related to getting advice from someone else because you don't know what the retailer is doing and often lose. Specifically, vague patterns such as "head and shoulders" are often referred to this way.
But the responsibility lies not with the market patterns themselves, but with the way they are used. Why do traders lose their trading patterns? The market repeats the pattern on a regular basis.
There is a real market phase that is basically based. For example, in cryptocurrencies, Bitcoin can be halved, affecting the market.
The other is a typical market participant. Traders trade their favorite markets, and people with similar focus and ideas go to the same market and trade markets with almost the same ideas, so they develop regular patterns. The mistake is to trust only one pattern. As John Bollinger's capital management company explains in the SEC Disclosure Pamphlet:
In technical analysis, charts can be used to identify market trends and patterns. This may be based on investor sentiment rather than business principles. The biggest risk when using technical analysis is that detecting past trends may not help predict such trends in the future.
The best approach is to consider the pattern as more general information about market conditions.
- Is the market trending or is it moving around the average? If you're drawing a market profile, you can determine if you're not sure. Is it an uptrend market? We are preparing for a steady uptrend and a bullish cycle.
- You can see the Ichimoku cloud and b-band patterns in a state that is likely to be a clue to a particular action. Is the market on a downtrend? We can make the bottom-even a simple observation of the Wykoff method and Fibonacci helps here.
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