EASY Way To Recognize Bullish Patterns - Crypto Trading For Beginners Part 1

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Hey guys, there have been quite a few comments asking for some help regarding some of my methods of trading - so I have decided to start a new tutorial series to help you guys along. In this first section, I would like to cover some of the EASIEST bullish trading patterns (IMHO) to spot within a market and discuss in detail how you guys can trade these patterns.

The first thing to know about trading is what type of trader you are. Are you a swing trader who will look for trades that can span anywhere from a day to a few weeks? Are you one of the traders who like to quickly open and close trades with small margins for profits and losses (otherwise known as a scalper)? Do you think you are good at trading with the trend or are you looking for trades that are reversals of the current trend? 

All of these questions need answering and can only be answered as you gain some experience trading. After some experience, you start to learn which style suits your personality the best. There is no right or wrong to trading, only winners and losers. There are a million methods of trading and you only need one to work for you. 

Reversal trading (or counter-trend trading) is one of the hardest types of trading around as it requires a very strong mind to be able to look for trades that go against the trend. This is why you may often hear traders quoting the phrase, “The trend is your friend” and “follow the trend until the bend at the end”. This is because looking for continuation pattern trades are very simple for most to understand.

The two continuation patterns I would like to cover both require a trend to already be established - and considering the fact we are looking for bullish patterns, this would mean that a bullish trend would need to be established.

 

Ascending Triangle

The fist bullish pattern we will cover is the ascending triangle formation. It is important to note that all triangles signal period of consolidation within a market - or periods of indecision if you will. These occur during a trend when the volume slows down as traders wait to decide on their next move - which then causes a lull in the trend. 

Typically, an ascending triangle formation signals a period of accumulation for traders. It is created when the market makes highs at the same level creating a flat top whilst simultaneously making higher lows. 

Each time the price reaches the top resistance level, the market becomes overbought and prices turn around until buying re-occurs at each subsequent touch on the trend line. The buying demand gains more and more control as the pattern continues, indicating a bullish bias until it eventually breaks-out of the upper resistance line. The breakout should come with a marked increase in volume. Typically the breakout will occur before the apex has even been reached. If the market continues beyond the apex, the pattern is invalidated. 

To trade this pattern, wait for a CLOSING candle above the triangle. After the candle closes you can place a buy trade with a target at the same distance as the anchor. Stops can go just beneath the resistance at the top line. 

Below I have some examples of ascneding triangles in real live market conditions. Try to visualize where the ascending triangle has formed before scrolling further down for the answers. No cheating! It won’t help you learn :)







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Here is the answer;



We can clearly see the upper resistance boundary around the $470 level marking the top of the triangle. Each time the market approached the upper boundary, the market was turned away. However, each time the market reached the rising support line the bulls started to buy again. We can see that the breakout occurred before the apex was even reached. 

In this example you could have entered anywhere above $480 after the initial candle on the breakout had closed. Placing a target the same length of the anchor would have resulted in a perfect trade which could have even extended further if left.




Symmetrical Triangles 

Symmetrical triangles are often harder to trade because they can go in either direction, regardless of the previous trend. However, typically the market will breakout toward the direction of the previous trend which makes this a great trading pattern so long as caution is exercised. 

It is a consolidation pattern which exhibits a coil-like structure that indicates a period of indecision within the market. Symmetrical triangles are great for swing traders and occur on any market at any time frame, however, the larger the timeframe the more valid the pattern becomes. 

It consists of 2 trend lines converging into each other to form a triangle. These consist of a rising and falling trend line in which price is confined within. 

To trade this bullish pattern we first need to already identify an uptrend that has started to show some signs of slowing down. Price action will bounce between the two trend line as the consolidation continues toward the apex. As the breakout candle CLOSES above the trend line you are free to enter with targets the same length as the anchor (as in the previous example). Stops can typically go beneath the previous “trough” at the lower rising support line.

Below is an example of a symmetrical triangle in the Litecoin market - can you spot it? Try to visualize where the triangle may be before scrolling down.





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Did you find it? Well here is the answer;



In this example, we can clearly see the bullish trend already in play. The trend started to slow down as May began trading - which was the start of the period of consolidation. We can see that the consolidation lasted for almost 2 months until the breakout occurred. During this time, we can see that price action was clearly confined between the 2 trend lines which form the triangle. 

As the breakout occurred, you would be free to place your buy order with a target the same size as the anchor. The stop, in this case, would have been on the last highlighted circle on the rising support trend line. 





So there you have it. Two VERY BASIC and VERY EASY to spot bullish trading patterns that EVERY trader should know. Please remember that these are CONTINUATION patterns that require a bullish trend to already be present. Do not go looking for these patterns in down-trending markets as the exact opposite of these patterns is required in this condition.

I hope this helps at least somebody out there to trade a little better. Bear in mind it takes a lot of time to gain experience in any skill so just keep looking at the charts and continue to try and find as many patterns as you can. If you have any questions feel free to send me a message or comment below and I will be more than happy to help you out!

Also, let me know what other trading methods you would like me to cover in my future posts. 

Happy Trading Amigos! Adios!


CryptoChartWizard91
CryptoChartWizard91

I dont *always* make good predictions, but when I do they're the best


Crypto Chart Wizard
Crypto Chart Wizard

My personal opinions and analysis of my the crypto projects that I follow. Not a financial advice.

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