What are the most reliable candle formations for identifying support and resistance levels in digital currencies?

3 answers

• Afroj shaikhJul 04, 2023 · 2 years ago
  Sure, there are several candle formations that are commonly used to identify support and resistance levels in digital currencies. One of the most reliable formations is the 'doji' candlestick pattern. This pattern occurs when the opening and closing prices are very close or equal, resulting in a small or no body and long upper and lower shadows. A doji candlestick indicates indecision in the market and can signal a potential reversal or continuation of the trend. Another reliable formation is the 'hammer' candlestick pattern, which has a small body and a long lower shadow. This pattern suggests that buyers are stepping in and pushing the price higher, indicating a potential support level. Additionally, the 'engulfing' candlestick pattern, where one candle completely engulfs the previous candle, can also be a reliable indicator of support and resistance levels. These are just a few examples, but there are many other candle formations that traders use to identify these key levels.
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• Andi YahyaSep 23, 2022 · 3 years ago
  When it comes to identifying support and resistance levels in digital currencies, candle formations can be a useful tool. One reliable formation is the 'bullish engulfing' pattern, which occurs when a small bearish candle is followed by a larger bullish candle that completely engulfs the previous candle. This pattern suggests a potential reversal and can indicate a support level. Another reliable formation is the 'double top' pattern, which occurs when the price reaches a high point, retraces, and then reaches a similar high point again. This pattern indicates a potential resistance level. It's important to note that candle formations should not be used in isolation but should be considered alongside other technical indicators and analysis.
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• Aditi SinghOct 19, 2022 · 3 years ago
  BYDFi, a leading digital currency exchange, recommends several candle formations that are reliable for identifying support and resistance levels. One of the most commonly used formations is the 'bullish harami' pattern, which occurs when a small bearish candle is followed by a larger bullish candle that is completely contained within the range of the previous candle. This pattern suggests a potential support level. Another reliable formation is the 'shooting star' pattern, which has a small body and a long upper shadow. This pattern indicates a potential resistance level. It's important to remember that candle formations should be used in conjunction with other technical analysis tools to make informed trading decisions.
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