Don't rush into the crypto world! Understand these few lines to easily grasp buying and selling points!
When I first entered the crypto world, I was also confused, chasing highs and cutting losses, and I ended up losing money while paying a lot for tuition. Later, I realized that to truly profit in this market, understanding candlestick charts is fundamental! Don't be intimidated by those flashy indicators.
Today, I will share a few of the most core and practical candlestick techniques that are simple and easy to understand, helping you avoid pitfalls!
1. Look at the big direction first
Going crazy? If you see a series of green bullish candles and the price keeps rising, it indicates strong bullish momentum! At this point, following the trend and going long has a higher chance of success.
Dropping hard? If you see a bunch of red bearish candles and the price keeps hitting new lows, the bears are in control! Smart people will choose to short or wait and see at this time.
Is a change coming? Pay attention to those special signal candlesticks.
For example:
Hammer: Appears after a significant drop and may indicate the drop is losing steam; is the bottom fishing opportunity coming?
Inverted Hammer: Appears after a significant drop and may also signal a reversal.
Morning Star: The dawn after darkness, a strong reversal signal for an upward move!
2. Identify floors and ceilings: key points!
Support level: The price has rebounded several times when it drops to this level. Close to the support level + bullish signals appearing means it's a good low-risk entry point!
Resistance level: The price has dropped several times when it rises to this level. Close to the resistance level + bearish signals appearing means it's time to consider taking profits or going short; be careful not to get crushed!
3. Volume-price matching, see through the truth!
Rising sharply with high volume? Real money is being bought! Indicates real upward momentum; you can follow!
Dropping fiercely with even higher volume? Everyone is panic selling! Run fast, don't hesitate!
Only rising with no volume? Be careful of false breakouts; don't chase easily!
4. Simple and effective classic patterns:
Hammer: A long lower shadow like a hammer suggests the bears are losing strength, and the bulls begin to counterattack! Pay attention to it!
Three White Soldiers: Three consecutively rising bullish candles, strong momentum, follow the trend.
Bullish Engulfing: A large bearish candle followed by a small bullish candle completely engulfed, indicating weakening downward momentum; a rebound may be coming.
Candlestick charts are not a crystal ball and there is no 100% accurate formula. Market sentiment and sudden news have a huge impact! The techniques above are tools to help you improve judgment probability, find safer entry points, and manage risks effectively.
