Reading Candlestick Charts: A Beginner’s Guide

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Reading of candlestick charts: a beginner guidelines for cryptocurrency trading

Cryptocurrencies such as Bitcoin and Ethereum have become increasingly popular in recent years. However, navigating in the complex world of cryptocurrency trading can be overwhelming for self -experienced investors. A tool that has proven to be a valuable resource for dealers are candlestick charts. In this article we will examine how Candlestick diagrams read and use you to get an insight into the price movements of cryptocurrencies.

What are candlesticks?

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

Types of candlesticks

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

* Hanging Hammer : A candle that forms when the closing price is lower than the opening price.

* Reversed 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 cock, which indicates indecisiveness or a lack of conviction on the market.

* Star shooting

: A candle that forms at the end of a downward trend, which indicates a possible reversal.

Reading of candlestick charts

In order to read Candlestick diagrams effectively, it is important to understand the following:

• Open and closing prices : These two prices represent the opening and closing values ​​for every day.

• Candle body : The body of the candle represents the price movement over time.

• witch lengths : The length of the wick on both sides of the candle represents the size of the price movement.

Interpretation of candlesticks ticket

Here are some common candle patterns and their interpretations:

* candlestick pattern 1 (hammer) : A strong upward trend with a small body.

* candlestick pattern 2 (reverse hammer) : a strong downward trend with a small body.

* Candlestick pattern 3 (doji) : A balanced market without a clear direction of trend.

* Candlestick pattern 4 (shooting star)

: A downward trend with a weak or non -convincing reversal.

Use candlestick diagrams to identify patterns

Here are some ways to use Candlestick diagrams to identify patterns and predict price movements:

• Search for reverse patterns : If the price forms an reverse pattern such as a hammer, reverse hammer, doji or shooting star, this can indicate a possible change in the trend.

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

• ** Use candlestick pattern to confirm the diagram signals

Tips for reading candlestick charts

• Practice, exercise, exercise : The more you practice to read candlestick charts, the better you will interpret you.

• Concentrate on the body of the candle : The body of the candle is often the most important part of the diagram because it represents the price movement over time.

• Use several time frames : Reading Candlestick diagrams requires understanding of several time frames such as short-term and long-term trends.

Diploma

Candlestick diagrams are a powerful tool for retailers to analyze cryptocurrency markets. If you learn how to read and interpret these diagrams effectively, you can get an insight into the price movements of cryptocurrencies and make more and more well -known trading decisions. Remember that candlestick patterns can be used to identify reversal points, to confirm diagram signals and to predict trend changes.

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