Trading Lesson 👨🏫#2 - Understanding Consolidations in Crypto
In today's lesson I will explain the difference in consolidations.
Some of you are new to the market and are probably wondering what's happening exactly when it's not moving in price and when it's moving down more than up but would later return to the last price it was.
Well to best answer that question.
It's called consolidation:
It's a thing that happens in the crypto market where waves of prices fluctuate up and down calculating the sells and buys of the market until it meets a point of exit - after consolidating the actual price of the market you're in, and only has two places it can go.
There are two types of consolidation.
The first is where it does a price correction where you have rapid 📉drops or rapid 📈rises.
An lastly is a repeated wave🏄🏼♀️ that can run in the same location for a few hours, sometimes days, give or take how many orders were made within the past few minutes - hours - days - weeks or months.
Consider it like a balloon🎈 being blown into until it 💥pops!💥
Now this is where the problem begins - we don't know where it may go once it's done, could go up or down and when that balloon has popped it's rapidly going there. We could see the 0.00002000 - range within a few hours or just see 0.00000900 range within a few minutes, depending on the orders made for shib and the rest of the market as a whole, this can last for days, weeks depending on the amount of buys or sells.
Also note these are when you get the same surprise jumps like we did in 2021. It started off from the 850's and jumped to the 0.00001300 within a day.
However; right behind it, is a price correction waiting for a peak in the returns to meet its end. Once that happens it'll just fall or rise back to where the price actually suppose to be and starting the process all over again.
You may not know it but there are all forms of consolidations on ever chart from 1 minute to 4 hours to 1 day to 12 months.
You're in a consolidation right now and you don't even know it. Like the ones that occur on a weekly chart, This is what I call "a Seasonal Trend" the day, week, or month, is in a seasonal consolidation and is trending high or low.
But note anything can stop a seasonal trend and disrupt the flow of it, but it will continue the process as long as the damage done was not to bad such as major crashes in a seasonal up trend due to outside interferences such as massive sell-offs, regardless it'll still attempt to rise back because it's in a wave that's trending up-word, if the wave was trending down then it would do way more damage than expected.
But the worst thing to do in a consolidation day - is to sell while it's consolidating, the price may not go no higher or no lower, and if you sell while at a low price in a consolidation you will likely lost position and will have to wait for it to finish to get more shares let alone the original shares, that's if it drops, so best to hold while in a consolidation day, at least until closing.
So I hope this answers anyone question as to why your crypto stock of choice is not moving anywhere, it may not move for hours or even days. you'll just have to wait for closing hour to see if it will pop - hopefully on a positive outcome.
So Happy Trading Everyone
Some of you are new to the market and are probably wondering what's happening exactly when it's not moving in price and when it's moving down more than up but would later return to the last price it was.
Well to best answer that question.
It's called consolidation:
It's a thing that happens in the crypto market where waves of prices fluctuate up and down calculating the sells and buys of the market until it meets a point of exit - after consolidating the actual price of the market you're in, and only has two places it can go.
There are two types of consolidation.
The first is where it does a price correction where you have rapid 📉drops or rapid 📈rises.
An lastly is a repeated wave🏄🏼♀️ that can run in the same location for a few hours, sometimes days, give or take how many orders were made within the past few minutes - hours - days - weeks or months.
Consider it like a balloon🎈 being blown into until it 💥pops!💥
Now this is where the problem begins - we don't know where it may go once it's done, could go up or down and when that balloon has popped it's rapidly going there. We could see the 0.00002000 - range within a few hours or just see 0.00000900 range within a few minutes, depending on the orders made for shib and the rest of the market as a whole, this can last for days, weeks depending on the amount of buys or sells.
Also note these are when you get the same surprise jumps like we did in 2021. It started off from the 850's and jumped to the 0.00001300 within a day.
However; right behind it, is a price correction waiting for a peak in the returns to meet its end. Once that happens it'll just fall or rise back to where the price actually suppose to be and starting the process all over again.
You may not know it but there are all forms of consolidations on ever chart from 1 minute to 4 hours to 1 day to 12 months.
You're in a consolidation right now and you don't even know it. Like the ones that occur on a weekly chart, This is what I call "a Seasonal Trend" the day, week, or month, is in a seasonal consolidation and is trending high or low.
But note anything can stop a seasonal trend and disrupt the flow of it, but it will continue the process as long as the damage done was not to bad such as major crashes in a seasonal up trend due to outside interferences such as massive sell-offs, regardless it'll still attempt to rise back because it's in a wave that's trending up-word, if the wave was trending down then it would do way more damage than expected.
But the worst thing to do in a consolidation day - is to sell while it's consolidating, the price may not go no higher or no lower, and if you sell while at a low price in a consolidation you will likely lost position and will have to wait for it to finish to get more shares let alone the original shares, that's if it drops, so best to hold while in a consolidation day, at least until closing.
So I hope this answers anyone question as to why your crypto stock of choice is not moving anywhere, it may not move for hours or even days. you'll just have to wait for closing hour to see if it will pop - hopefully on a positive outcome.
So Happy Trading Everyone