Read and interpret the cryptocurrency volume -read diagrams
As the popularity of cryptocurrencies continues to grow, merchants and investors are increasingly turning to online platforms and tools to monitor market trends and make sound decisions. One of the most important aspects of cryptocurrency trade is to understand how to read and interpret trading quantitative diagrams. In this article, we break down the basics of the cryptocurrency dealership volume and give tips to effectively analyze these diagrams.
What is trading quantity?
Trading volume refers to transactions that occur at a given period, usually in units such as dollars or coins. This is a basic measure for merchants to understand market dynamics as it indicates the level of interest and activity in a particular cryptocurrency. In other words, trading quantity is a key indicator of liquidity and demand.
How to read the Trading Volume Tables
Follow these steps to read and interpret the trading volume effectively:
- Understand the diagram : Different diagrams have different characteristics that indicate different market conditions. For example:
* Line diagram: focuses on price movements over time.
* BAR Diagram: Displays the closing prices of each rod.
* Candle holding diagram: shows the highest and lowest prices, as well as the open and closing prices of each day.
- Determine trading quantities : Find changes in trading volume that may indicate significant market activities. For example:
* Increased or reduced quantities may indicate the shift of price momentum.
* Increasing or decreasing volumes may indicate the upcoming wave or decrease over time.
- Analyze the context of the diagram : Consider the following factors when interpreting trading volume diagrams:
* Time frame: Trading quantity varies greatly depending on the duration. Short -term transactions are often high, while longer -term transactions can show lower quantities.
* Market conditions: Economic indicators such as GDP, inflation rates and interest rates can affect trading volumes.
* Liquidity levels: High liquidity (high quantity) or low liquidity (low volume) can affect market dynamics.
- Look for samples : Identify repeated samples in the diagram that may indicate a tendency or potential outbreak. For example:
* Consistent increase in trading volume may indicate a strong increase after the initial downturn.
* A reduction in the amount of trading after surge may suggest repair or reversal.
The general samples you want to watch
- Increasing tides : Increased trading volume often follows rising prices, indicating demand and interest in the device.
- Falling tides : The reduced trading volume can indicate the selling pressure or possible breakdown.
- Candlestick patterns
: Certain candle holders can indicate patterns such as a hammer or shooter star, turning or eruption.
4.
Interpretation of Trading Volume -Diagrams
Use the following criteria to make a fair decisions when interpreting trading quantitative tables:
- Volog above the price : If the price is above the average 20 periods above moving average and the trading volume increases significantly, this may indicate a possible outbreak.
- Volume Momentum : If the quantities increase with the price movements (for example, both rise or decrease), but still show some volatility, it may suggest a change in the medium -term trend.
- Trade Volume Trends : Find consistent trends in trading volume that can control decision -making.
Conclusion
Reading and interpreting trading quantitative diagrams is crucial for merchants to acquire investing in cryptocurrencies.
