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Crypto world work①: High win rate structure "Bottom Division Type"
The bottom division type usually appears at the end of a downtrend, consisting of 3 to 4 candlesticks.
is one of the classic combinations that is easiest for novice friends to learn and recognize.
The larger the volume of the third bullish candle, the higher the degree of engulfing, making it more reliable.
The combination with the bottom doji is simply perfect!
1. Technical Characteristics of Base Score Type
1. Occurs during a downtrend.
2. Composed of three K lines, the first is a bearish line, the second is a small bearish line, small bullish line, or a doji with a low opening, and the third is a bullish line.
3. The third bullish candlestick should have a large body, nearly fully recovering or engulfing the body of the first bearish candlestick.
2. The technical meaning of the bottom-divided model
The bottom formation is a common high-probability bottom reversal signal. This pattern indicates that after a significant price drop, the selling pressure has almost been fully released, and the price is too weak to fall further. The bullish candlestick on the right side suggests that the bulls are starting to fight back, intuitively reflecting the comparison of bullish and bearish forces. Therefore, the probability of a structural reversal is very high, and the market outlook is bullish!
The bottom split perfectly reflects the short-term trend reversal in Dow's theory:
The first bearish candle has a low that is lower than the previous low.
The second K-line shows that the coin price has stopped falling and is consolidating.
The third bullish candle has a high that is higher than the previous high.
3. Practical Logic
The first bearish candle is like a car driving on the highway; the drop of the bearish candle is comparable to the speed of the car, and the trading volume is akin to the power. The smaller the drop, the slower the speed; the smaller the trading volume, the less the downward power.
The second K line shows the entire process of the car slamming the brakes, coming to a stop, and making a U-turn.
The third K-line is a bullish line, just like the first bearish line. The size of the bullish line's increase and trading volume is analogous to speed and power. The greater the increase, the faster the speed; the larger the trading volume, the stronger the buying momentum.
Feedback in the trend refers to when the coin price drops to a certain level and the bears lose strength, unable to drop further. The bulls take the opportunity to counterattack, reversing the trend in one fell swoop. Therefore, traders can follow up and buy after a bottom formation appears!
Special reminder:
When the bottom-falling type and ascending flag pattern appear simultaneously, the probability of a subsequent rise is very high, and it is also an important signal for identifying the end of the flag pattern.
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