Reading Candlestick Charts: A Beginner’s Guide

Reading Candlestick Charts: Guide Beginner of Cryptoms Trading

Cryptomena, such as Bitcoins and Ethereum, have become increasingly popular in recent years. However, navigation in the complex world of crypto -trading can be stunning for experienced investors. One of the tools that proved to be a valuable source for merchants is candle maps. In this article, we will examine how to read candles maps and use them to get an overview of the price moves of the cryptocurrency.

What are candles?

Candle charts are the type of chart tool used in technical analysis to visualize prices movements over time. Each candle represents opening and final prices for a certain period of time, as well as all open interest (number of unpaid units). The size and color of each candle indicate the size of the price movement.

Candle species

There are several types of candles but here are some of the most common:

* Hanging hammer : Candle that is formed when the final price is lower than the starting price.

* Inverted hammer

: Candle that is formed when the final price is higher than the starting price.

* Due : A candle that forms a small body with a long tail, suggesting indecision or lack of belief in the market.

* Shooting Star : A candle that is formed at the end of the downtrend, indicating a potential reversal.

Reading candlestick graphs

To efficiently read cats of candlesticks, it is necessary to understand the following:

• Open and close prices : These two prices represent opening and final values ​​for each day.

• Candle body : Candle body represents over time the movement of prices.

• Way length : The length of the wicks on both sides of the candle is the size of the price movement.

Interpretation of candle patterns

Here are a few common candles patterns and their interpretations:

* Candle pattern 1 (hammer) : Strong upward direction with a small body.

* Candle pattern 2 (inverted hammer) : a strong declining trend with a small body.

* Candle Pattern 3 (Due) : The balanced market without the clear direction of trends.

* Candle pattern 4 (Shooting Star) : Downtrend with weak or unconvincing reversal.

Using Matier Candles to identify patterns

Here are several ways to use candles maps to identify patterns and predict prices movements:

• Search for reversal patterns : If the price is a reverse formula, such as a hammer, an inverted hammer, a touch or a shooting star, this may indicate a potential change in the trend.

• Identify trend changes : Candles can help you determine when to buy or sell based on changes in trend.

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Use candlestick patterns to confirm the graph signals : Many graph signals, such as breakouts and twists, require confirmation from candle patterns.

Tips for reading candlestick graphs

• Exercise, practice, exercise : The more you practice reading candlestick graphs, the better you will interpret.

• Focus on the candle body : the candle body is often the most important part of the graph, as over time it represents the movement of prices.

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Use more time frames : Reading candlestick charts requires understanding several time frames, such as short -term and long -term trends.

Conclusion

Candle charts are a powerful tool for traders for analysis of crypto markets. Learning how to read and interpret these charts effectively, you can get an overview of the price moves of the cryptocurrency and make more informed business decisions. Remember that candles patterns can be used to identify the reversal points, to confirm the graph signals and predict trend changes.