Having an understanding of cryptocurrency charts is important as it allows people to plan their investing/trading and forecast important events. It’s essential to track major charts, such as Monero (XMR) or Bitcoin (BTC), because they set the pace for other cryptocurrencies.
Let’s take a closer look!
What Is the XMR Chart?
A market chart is like a summary of the performance of a stock market over a particular time frame. The chart allows you to see past events and trends in market performance so you can make informed decisions on future events.
The XMR chart shows the change in the price of XMR over time, allowing traders to use technical analysis methods.
How to Analyze the XMR Chart?
There are different ways to analyze the XMR chart:
1. Dow Theory Basics
To understand the technical analysis of XMR charts, you should familiarize yourself with the basics of Dow Theory:
- The market considers every detail (existing and upcoming) during pricing, and these details are integrated into the current asset price.
- Analysts focus on coin price and not all variables that cause price movement.
- Price movement follows a trend – either short- or long-term.
- Multiple variables are considered for crypto, such as the past, present, and future demands, as well as market regulations.
History repeats itself when cryptocurrencies are involved, so understanding the patterns will help you make the right choices.
2. Time frame
Different time frames are considered when analyzing price charts. Commonly used time frames are 15-minute, hourly, 4-hour, and 1-day charts. The time frame depends on the different trading styles of individual traders; they are either long-term or intra-day traders.
3. The Candlestick Method
This is the most popular chart method, which is also used for BTC to XMR charts. The chart shows different candlesticks, which depict the asset price movement at a particular time. The candles depict the opening, highest, lowest, and closing prices.
4. Support and Resistance Strategy
This strategy refers to a predetermined level of an asset price and the point at which the trend starts to reverse. Different price touches denote the levels. Resistance is where the traders sell and support is where they buy.
5. Trend Lines
This is a straight line connecting different price points and can be extended into support or resistance lines. They are important for crypto charts. With trend lines, it is easy to identify and confirm trends. The two types of trend lines are the upward and downward lines.
6. Bollinger Band
This tool is named after the developer, John Bollinger, and is defined by lines plotted by the negative and positive standard deviations on the crypto price curve, away from the simple moving average. You could adjust the SMA period depending on your preferences.
Make Your Own Analysis
Understanding the XMR chart and the various methods of analysis makes it easier to trade Monero successfully. You’ll be able to do your own analysis and come to the right conclusions.