Reading Candlestick Graphics: A guide for beginners for cryptocurrency negotiations
Cryptocurrencies, such as Bitcoin and Ethereum, have become increasingly popular in recent years. However, navigating the complex world of cryptocurrency negotiations may be overwhelming for experienced investors. One tool that proved to be a valuable feature for traders is candle charts. In this article, we will explore how to read candlestick charts and use them to get information about cryptocurrency price movements.
What are candlesticks?
Candle 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, 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 here are some of the most common:
* Hammer suspended : A candle that forms when the closing price is lower than the opening price.
* Inverted hammer : A candle that forms 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.
* Shot star : A candle that forms at the end of a low trend, indicating a potential reversal.
Reading candle charts
To read the candle charts effectively, it is essential to understand the following:
- Open and close 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 both sides of the candle represents the magnitude of the price movement.
Interpreting candle patterns
Here are some common candle patterns and their interpretations:
* Pattern of candles 1 (hammer) : A strong upward trend with a small body.
* Pattern of candles 2 (inverted hammer) : a strong descending trend with a small body.
* Candlestick Pattern 3 (Doji) : A balanced market without a clear trend direction.
* Candlestick Pattern 4 (Shot Star) : A low trend with a weak or non -convincing reversal.
Using candle charts to identify patterns
Here are some ways to use candle charts to identify patterns and predict price movements:
- Look for reversal patterns : When the price forms a reversal pattern, such as a hammer, inverted hammer, doji or shot star, it may indicate potential change in trend.
- Identifying trend changes : Candlesticks can help you determine when you buy or sell based on trend changes.
- Use candle patterns to confirm chart signs : Many chart signs such as leaks and reversals require confirmation of candle patterns.
Tips for reading candlestick charts
- Practice, practice, practice : The more you practice reading candle charts, the better you will become in interpreting 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 : Reading of 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 graph signals and predict trends changes.
