Reading and interpretation of cryptocurrency trade cabins
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Since the popularity of cryptocurrencies continues to grow, retailers and investors are increasingly using -line platforms and tools to monitor market trends and make well -founded decisions. A crucial aspect of the cryptocurrency negotiation is to understand how commercial volume diagrams are read and interpreted. In this article we will share the basics of the cryptocurrency trading diagrams and give tips on the effective analysis of these graphics.
What is the negotiation volume?
The negotiation volume refers to the total number of negotiations, which are measured in units such as dollars or coins over a certain period of time. It is an essential metric for retailers to understand the market dynamics, since they display the interest and activity in a certain cryptocurrency. In other words, the negotiating volume is a liquidity and demand and demanding indicator.
How to read negotiation volume diagrams
To read the negotiation volume diagrams and to interpret them effectively, follow these steps:
- Understand the type of diagram : Different types of graphics have different properties that display different market conditions. For example:
* Line line: Concentrates on price movements over time.
* Balk Diagram: Displays the final prices for each bar.
* Candle map: shows the highest and highest prices as well as open and closed prices for every day.
- Identify commercial volumes : Look for changes to the negotiation volume that can indicate considerable market activities. For example:
* Increased or reduced volumes can display a change at the time of the price.
* Increased volumes or falling waste can signal an upcoming increase or decline.
- Analyze the context of the diagram : Look at the following factors by interpreting negotiation volume diagrams:
* Term: The negotiation volume varies strongly depending on the period. Short -term negotiations usually have high volumes, while long -term negotiations can have lower volumes.
* Market conditions: Economic indicators such as GDP, inflation rates and interest rates can affect the negotiation volume.
* Liquidity level: high liquidity (high volume) or low liquidity (low volume) can affect market dynamics.
- Search for standards
: Identify recurring standards in the graphic that can signal a possible trend or escape. For example:
* A consistent increase in the commercial volume after a first retreat can indicate a strong high trend.
* A decline in the trading volume after an increase can indicate a correction or reversal.
to see frequent standards
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- Falling Tides : Diminated negotiation volumes can indicate sales pressure or a possible collapse.
- Candle pattern : Certain candle patterns, such as the hammer or the shooting star, can signal or escape.
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Interpretation of the negotiation volume diagrams
To make well -founded decisions, use the following criteria when interpreting negotiation volume diagrams:
- Volume of the price : If the price is moving above the average moving average of 20 periods and the negotiation volume increases significantly, this can indicate a possible escape.
- Volume pulse : If the volumes in connection with price movements (e.g. ascent or climbing) increase, but still have a certain volatility, this can indicate a change in the intermediate trend.
- Commercial volume trends : Search for consistent trends in the negotiation volume that can lead your decision -making.
Diploma
Reading and interpreting the graphics negotiation volume is a crucial ability for traders to dominate by investing in cryptocurrencies.