If you have joined crypto trading then it is important for you to know about crypto charts because by knowing the same charts you can make your trading easier. It may be a bit difficult to explain this in details in just one article, that is why you will get the link below through which you can know by watching the video.
The main part of the candlestick shows the difference between the open price and closing price of a given cryptocurrency. The longer the body, the greater the price change. A shorter green body indicates a smaller price increase, while a longer green body indicates a more drastic and faster price increase.
How To Read Crypto Charts For Beginners
It tracks trading activity regardless of the length of a particular trading period, whether that period is minutes, hours, days or weeks. Changes in price happen at random times when one cannot exactly expect from the traders, we need to be able to handle the risks of such trades and make probability and this is where you will need the help of charts.
Charts are very easy to use because you can get price changes just by looking at them. On the chart, you will see how different currencies move and you can trace the trend of going up or down at a particular time. It has to do with two axes and the Y axis is on the vertical side, and it stands for the price scale while time is depicted on the horizontal side which is the X-axis.
In the past, people used hands to create charts, but nowadays, there is software that can plot them from left to right across the X-axis.
What Is Crypto Chart
A crypto chart is a snapshot of historical and current price action over a specific time frame, ranging from seconds to years and more.
Different Types Of Crypto Charts
Now we will learn about different types of charts, if you are going to trade then it is very important for you to know this. Let’s know about all those charts
- Line Chart
- Linear Line Charts
- Candlestick Chart
- Depth Charts
1. Line Chart
These show us historical price points over time, whether we want to look at minutes, days, weeks or years, the chart will show the daily closing price during that time period. The time frame you will look at will depend on the trending strategy you are using.
2. Linear Line Charts
Linear line charts divide the price scale into equal pieces, while log charts measure price according to percentage change. You can easily switch between linear or log scale by clicking on Log at the bottom there. Linear charts best show the speed of price change, while log charts make it easier to identify trends.
3. Candlestick Chart
Traders use candlestick charts because they see price patterns with a lot of information at a glance. Candlestick charts are green and red chandlers. These candles contain a lot of different information, and green candles show that an asset, like Bitcoin, closed at a higher price than it opened in that certain time frame.
However, red candles show the opposite. The price closed lower than it opened. Candles measure a set amount of time. And this can happen anywhere from seconds to years. Each candle on a candlestick chart has four parts. Each candle has a body and two wicks, upper and lower wick.
This closely mirrors the last recorded process. Generally the longer the body of the candle stick, the more intense the buying and selling was during that time frame. If the wicks are small it means that the high or low occurred close to the opening and or closing price.
Candles give us an idea of how volatile the market is, if we are looking at the candles from a TA perspective, the more volatile the market, the greater the potential for profit or loss.
4. Depth Charts
Toggle from the trading view in the upper left corner to get the depth chart. The depth chart shows us all the market makers who want to buy or sell an asset, and the price they are willing to pay.
Trend lines are diagonal lines drawn on a chart that connect specific data points. They make it easy to see price movement and market trends. It is generally agreed that trend lines must connect three or more points together to be considered valid.
The main thing to know about trend lines is that they are the points you connect. In an uptrend, you draw lines using the lowest values in a line chart. So you go under the candle. And in a downtrend, you use the highest values, so you go from the top. Based on these highest and lowest trend lines, supply and demand are indicated in the market.
A valid trend line only needs to be tested several times to show a coincidence or price fluctuation. When we extrapolate trend lines into the future using moving averages, they act as lines of resistance, or support depending on whether they are at the bottom or top.
List Of India Private Cryptocurrency
Transactions in which you cannot stress about them come under what we call private cryptocurrencies.
How price charts work
A price chart shows variations in demand and supply and sums up each of your trading transactions at all times. Various news items you will find in the charts and also include future news and expectations, which helps traders adjust their prices. However, this news may be different from what is to come in the future and at this time, traders will make further adjustments and change their prices. This cycle continues further.
Whether the activities are coming from multiple algorithms or humans, the chart blends them. This is similar to how you would find different information on the charts regarding your transactions from an exporter, central bank, AI, or even retail traders.
Shooting Star Candle Pattern
A shooting star candle pattern is a bearish reversal pattern that forms at a rally high before reversing. This pattern consists of a candle with a long upper wick and a short body, as can be seen in the image above. A shooting star candle pattern indicates drive-by buyers who face resistance.
How to read candlestick charts
To read a candlestick chart, you first need to understand that it comes in two formations; Seller and buyer candles as seen below.
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If you don’t know how Forex works, you are bound to make many mistakes and the first step to prevent this from happening is learning how to read charts. There are many types of Forex charts, but the three we have highlighted are the top ones. You can go with whatever suits you and understand how charts work before diving into the world of Forex.