When using technical analysis to predict price trends in futures contracts, some key points on the candlestick chart can help you identify entry and exit points:
Support and resistance levels:
Support levels are where the price tends to bounce up from a low (the price cannot fall below this level for a certain period).
Resistance levels are where the price tends to not be able to break through, meaning where the price stops or declines after rising.
Reversal candle patterns:
Candle patterns like Engulfing, Hammer, Shooting Star, or Doji can indicate a trend reversal.
Doji is particularly important, as it shows indecision between buyers and sellers. If a Doji appears after a strong uptrend or downtrend, it may signal a reversal.
Technical indicators:
Indicators like MACD, RSI, Moving Averages (MA) can help you identify entry/exit signals when the price trend crosses moving averages or when these indicators give overbought/oversold signals.
Supply/Demand on the candlestick chart:
Strong growth in volume accompanied by a significant price increase or decrease can confirm the current trend.
Breakout and Pullback:
When the price breaks a strong support or resistance level, it is a breakout signal.
If after a breakout the price returns to test the old level and then continues to move in the direction it broke, that is a pullback and may be an opportunity to enter a trade.
Trendlines:
You can draw trendlines connecting the highs or lows to identify upward or downward trends. Breakouts of trendlines can be signals for a change in trend.
In futures contracts, when analyzing candlestick charts, you should combine multiple factors to make appropriate trading decisions, especially in highly volatile markets like BTC or other coins.