Cryptocurrency Basics 💪 Let newbies easily understand candlestick charts

Basic components of a candlestick: Opening Price: The first transaction price of the trading day. Closing Price: The last transaction price of the trading day. Highest Price: The highest transaction price during the trading day. Lowest Price: The lowest transaction price during the trading day. A candlestick typically consists of three parts: Upper Shadow: Located above the candlestick, indicating the price range between the highest price and the closing price (or opening price, depending on the nature of the candlestick). Body: Indicates the price range between the opening price and the closing price.

Bullish Candle (red or white) indicates that the closing price is higher than the opening price, while Bearish Candle (green or black) indicates that the closing price is lower than the opening price. Lower Shadow: Located below the candlestick, indicating the price range between the lowest price and the opening price (or closing price, depending on the nature of the candlestick).

Interpretation of candlesticks: Interpretation of a single candlestick Bullish and Bearish Candles: A bullish candle indicates that the market is rising during that period, while a bearish candle indicates a decline. Size of the body: The longer the body, the stronger the market's momentum. A longer bullish candle body indicates more upward momentum; a longer bearish candle body indicates greater downward momentum. Length of shadows: The longer the shadow, the stronger the resistance or support in that direction. A longer upper shadow indicates greater resistance to upward movement; a longer lower shadow indicates stronger support.

Interpretation of candlestick patterns: Double Bottom and Double Top: A double bottom (W bottom) is a signal for the market to turn from down to up; a double top (M top) signals a turn from up to down. Head and Shoulders Bottom and Head and Shoulders Top: A head and shoulders bottom is a pattern indicating a reversal to upward movement, while a head and shoulders top indicates a reversal to downward movement. Engulfing Pattern: An engulfing pattern typically indicates that a market reversal may be imminent.

Doji: A doji indicates that the opening price and closing price are the same during that period, reflecting a balance of power between buyers and sellers. Appearing at a high position may indicate a top, while appearing at a low position may indicate a bottom. Red Three Soldiers and Three Black Crows: Red three soldiers are three consecutive bullish candles, indicating a strong upward market; three black crows are three consecutive bearish candles, indicating a weak downward market. However, it should be noted that three black crows during an upward trend may indicate accumulation of strength by bulls. Considering position and volume: Position: The position of the candlestick is crucial for determining its nature.