[TP Academy⑤] "It goes up as soon as I buy, and drops as soon as I sell"... Your chart is lying

For investors swaying amidst the noise of the cryptocurrency market, ‘TokenPost Academy’ with 8 years of on-site experience will provide true investment standards. We invite you to embark on a seven-stage master class journey that replaces ‘feelings’ with ‘data’ and ‘luck’ with ‘strength’. [Editor’s Note]

“Why do those who claim to read charts still fail to make money?”

Many individual investors load various auxiliary indicators onto their charts for trading. But the results are always similar. Seeing a surge in bullish candles, they chase and buy, only to be trapped at the top; in fear, they cut losses at the bottom. Why is this? Because the charts you are looking at are causing an ‘illusion’.

◆ Your charts are distorted: Linear Chart vs Logarithmic Chart

Most HTS or exchange default settings are ‘linear charts’. These are based on absolute price changes (amounts). They display a rise from 100 yuan to 200 yuan the same way as from 1 billion yuan to 1 billion and 100 million yuan.

But for assets like cryptocurrencies that can grow thousands of times, this is deadly. Using a linear chart, past price movements near the bottom are almost invisible, while recent prices appear as huge peaks. This implants a fear of ‘rising too much’.

To see the truth clearly, you must turn on the ‘logarithmic chart’. Log charts are based on ‘returns (%)’. They display a rise from 10 yuan to 100 yuan (10x) the same way as from 10 million yuan to 100 million yuan (10x). The moment you open a log chart, Bitcoin’s past 10 years of history will appear as a smooth, proportionally growing upward curve, not an unruly surge.

◆ How to interpret trend endings: ‘Head and Shoulders’ and ‘Double Bottom’

Knowing when a bull market ends and a bear market stops is the realm of the divine. But the market sends signals through ‘patterns’.

Head and Shoulders: Appears when an uptrend is exhausted. After reaching the head (highest point), the price falls back, then attempts to rebound again, but if the right shoulder fails to surpass the head and turns downward, the neckline being broken signals a trend reversal to downtrend. The phrase ‘buy at the knees, sell at the shoulders’ refers to selling after confirming the formation of the right shoulder.

Double Bottom: Appears when a downtrend stops. When the price solidifies the bottom twice in a ‘W’ shape and breaks through the previous high, it is a strong buy signal.

◆ Don’t predict, confirm

The core of chart analysis is not prediction but ‘confirmation’. ‘Does this look like a double bottom?’ Buying early based on this is gambling. Waiting for the pattern to complete, volume to increase, and a confirmed breakout of the neckline is never too late.

Use logarithmic charts to see the forest (long-term trend), and candlestick patterns to see the trees (entry timing). This is the basic skill for traders to stop blindly following trends and to walk alongside smart funds.

👉 [Practical Trading] Even drawing just one line on a chart can lead to different returns. From TradingView charting methods to auxiliary indicator applications and practical buy-sell timing techniques, all are taught in TokenPost Academy ‘Stage 4: The Trader’.

(Enroll now: