How to Read Cryptocurrency Candlesticks for New Beginners

Lutfi

How to Read Cryptocurrency Candlesticks for New Beginners
How to Read Cryptocurrency Candlesticks for New Beginners

Rancakmedia.com – Cryptocurrency candlesticks are one of the important tools used by cryptocurrency traders to find buy or sell locations on crypto charts.

Traders can use line charts and bar charts for technical price analysis, among other types of charts. Candlestick charts, on the other hand, provide unique benefits that other forms of charts cannot match.

Why Should You Learn Candlesticks?

If you have ever looked at or even studied Japanese Candlesticks, you will definitely be surprised by the amount of information you will glean from these chart patterns.

One of the reasons candlesticks are so popular is because they make it easy to see where the highest (High) and lowest (Low) points are, as well as the opening (Open) and closing (Close) positions. Candlesticks can represent negative, neutral, or optimistic market emotions in various ways and under various headings.

Most of the time, the following candlestick chart moves in prediction with what the previous chart predicted. However, there is no guarantee that the following steps will always be correct even though most situations show that the predictions are correct.

How is that possible? Simply because most traders will operate under the same assumptions. Based on previous candlestick patterns, traders will determine the choice of being bullish or bearish. Candlestick charts have developed into a kind of forecasting tool.

However, this may not apply to all traders at all times. To stimulate price movements that are opposite to the previous candle's forecast, key market makers (strong market makers) sometimes operate against the candlestick's bias and surprise other traders.

Market makers who rely on more than just candlesticks may trigger this. Therefore, candlestick patterns in Bitcoin charts or crypto cannot be used as a reference for anticipating market value in the long term. Logically, candlesticks will not tell traders the future value of a cryptocurrency. Is not it?

Understanding Cryptocurrency Candlesticks

Although cryptocurrency candlestick patterns are not trusted by strong market makers for the long term, they can serve as a guide for retail traders to spot price movements, at least in the short term to take advantage of price fluctuations.

To be able to trade cryptocurrencies effectively, you must first understand how to interpret cryptocurrency candlesticks.

The use of cryptocurrency candlesticks can reveal signs of trend continuation or reversal, so traders can know whether to buy or sell, just as in the forex market and other industries.

The use of a time frame is an important component that must be considered, because each candlestick symbolizes price movements within a certain time period. So when a trader studies candlesticks in a 1 minute time frame, he will find candlestick movements that occur every 1 minute.

A candlestick chart for one week will show him the opening, closing, weekly high and weekly low prices in one single candlestick image.

Popular Patterns in Cryptocurrency Candlesticks

A closing price that is lower than the opening price indicates a bearish candlestick.
A candlestick with a closing price higher than the opening price is marked as bullish, and it indicates that the price is rising.

A close that is within a few cents of the opening price is considered a neutral candlestick because it represents a balance between the market's buying and selling power. This condition is often considered a sign of market uncertainty.

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Lutfi

Hi, let me introduce myself, Lutfi Hulasoh, I am a writer and techno blogger. I started creating a personal blog writing informative articles about the latest trends and developments in technology. My writing covers a wide range of topics, from mobile applications to artificial intelligence, and I can also provide easy-to-understand explanations to help readers understand complex concepts.