Did you know you will make money in crypto trading by just following the trends? But what happens if the trend suddenly changes, and how does someone determine the signs of the change?
Many times, a rising trend line was suddenly broken, and prices suddenly fell and then rose again. After some time, the prices fell again and returned below the previous rising trend line. This situation is very disturbing for many crypto traders; it is known as a trend reversal.
When you are following the trend, you always make 3 lines with respect to support or resistance levels. Like in the above figure, I have created three red lines, and this will indicate how many times prices fall from their previous high.
In the above figure, it is clearly seen that the prices rise after some time of consolidation. 1 indicates the prices in the mode of consolidation, 2 refers to the prices taking some high position, and 3 indicates the highest jump.
In both the uptrend and low trend, the third line always indicates the breakout or breach, and it also shows us the trend reversal signal. The three lines are also considered as primary trend, secondary trend, and short and third trend.
In summary, there are other reversal patterns, but the above one is a simple one to understand. Thanks for reading this article.
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