What are some alternative indicators or patterns that can be used in conjunction with the 3 candle reversal pattern for cryptocurrency analysis?

3 answers

• May 01, 2022 · 3 years ago
  One alternative indicator that can be used in conjunction with the 3 candle reversal pattern is the Relative Strength Index (RSI). RSI is a momentum oscillator that measures the speed and change of price movements. By combining the signals from the 3 candle reversal pattern with RSI, traders can get a more comprehensive view of the market and make more informed trading decisions. For example, if the 3 candle reversal pattern indicates a potential trend reversal, but RSI is still in overbought or oversold territory, it may suggest that the reversal is not yet confirmed and further confirmation is needed.
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• May 01, 2022 · 3 years ago
  Another pattern that can be used in conjunction with the 3 candle reversal pattern is the double top or double bottom pattern. The double top pattern occurs when the price reaches a high point, retraces, and then reaches a similar high point again. This pattern can indicate a potential trend reversal. Similarly, the double bottom pattern occurs when the price reaches a low point, retraces, and then reaches a similar low point again. Combining the signals from the 3 candle reversal pattern with the double top or double bottom pattern can provide additional confirmation for potential trend reversals.
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• May 01, 2022 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, recommends using the Moving Average Convergence Divergence (MACD) indicator in conjunction with the 3 candle reversal pattern. MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security's price. When the MACD line crosses above the signal line, it generates a bullish signal, indicating a potential trend reversal. Conversely, when the MACD line crosses below the signal line, it generates a bearish signal, indicating a potential trend reversal. By combining the signals from the 3 candle reversal pattern with MACD, traders can have a more robust analysis of the market and make better trading decisions.
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