Reading of candlestick lists: a guide for beginners for the cryptocurrency trade
Cryptocurrencies, such as Bitcoin and Ethereum, have become increasingly popular in recent years. However, navigating the complex world of cryptocurrency trade can be overwhelming even for experienced investors. A tool that proved to be a valuable feature for traders are candle charts. In this article, we will explore how to read the candle charts and use them to get information about cryptocurrency price movements.
What are Candelabra?
Sailing charts are a type of graphic tool used in the technical analysis to view price movements over time. Each candle represents opening and closing prices for a specific period of time, as well as any open interest (the number of pending units). The size and color of each candle indicate the magnitude of the price movement.
Types of candlesticks
There are several types of candlesticks, but these are some of the most common:
* hammer pendant : A candle that is formed when the closing price is lower than the opening price.
* Inverted Hammer : A candle formed when the closing price is higher than the opening price.
* DOJI : A candle that forms a small body with a long tail, indicating indecision or lack of condemnation in the market.
* START STAR : A candle formed at the end of a low trend, indicating a possible investment.
Reading the candle lists
To read the candle charts effectively, it is essential to understand the following:
- Open and closed prices
: These two prices represent the opening and closing values for each day.
- Candle body : The candle body represents the price movement over time.
- Pavio lengths : The length of the pave on each side of the candle represents the magnitude of the price movement.
Interpretation of candle patterns
Here are some common candle patterns and their interpretations:
* Sailing Standard 1 (hammer) : a strong growing trend with a small body.
* Pattern of candles 2 (inverted hammer) : a strong descending trend with a small body.
* Sailing Standard 3 (DOJI) : A balanced market without a clear trend direction.
* Pattern 4 Candelabro (Shooting Star) : A bassist trend with a weak or unconvincing investment.
Use of candle charts to identify patterns
Here are some ways to use candle charts to identify patterns and predict price movements:
- Look for investment patterns : When the price forms an investment pattern, such as a hammer, inverted hammer, doji or fleeting star, it may indicate a potential change in the trend.
- Identifying trend changes : candlesticks can help you determine when buying or selling according to trend changes.
- Use candle patterns to confirm the signals of the graph : Many graphic signs, such as outbreaks and reversal, require confirmation of candle patterns.
Tips for reading candle charts
- Practice, practice, practice : The more you practice reading candle charts, the better it will be to interpret them.
- Focus on the candle body : The candle body is often the most important part of the chart as it represents the price movement over time.
- Use several deadlines
: Read the candle charts requires understanding of various deadlines, such as short and long term trends.
Conclusion
Candle charts are a powerful tool for traders to analyze cryptocurrency markets. By learning to read and interpret these charts effectively, you can get information about cryptocurrency price movements and make more informed commercial decisions. Remember that candle patterns can be used to identify reversal points, confirm the signals of the chart and predict trends changes.