TradingView was established in 2011 and is a data analysis platform for viewing K-line charts. Financial investment products related to US stocks, cryptocurrencies, futures, foreign exchange, etc., can all be analyzed on TradingView. This article will guide you step by step on how to use TradingView to draw trend lines and how to interpret the KD value and golden cross.
Table of Contents
Those who want to enter the cryptocurrency investment circle all hope to make money. But how can one ensure a higher win rate in the highly volatile cryptocurrency market instead of constantly losing money and facing total loss? Relying solely on one's intuition or believing in others' news is akin to gambling; hence, we need to rely on 'technical analysis' to help us judge market trends. This way, we can avoid making irrational investment decisions due to the rapidly changing market conditions in cryptocurrencies. If you don’t understand what technical analysis is, what technical indicators you need to know, and how to use the exchange app to view charts, it’s recommended to read the articles below.
Which trading indicators are the best to use? This article will focus on practical operations, using the TradingView charting tool to show you how to use technical analysis, how to draw trend lines, and without further ado, let’s clarify all your doubts.
What is TradingView? Basic interface, introduction to K-line charts.
[TradingView was established in 2011 and is a data analysis platform for viewing K-line charts. Financial investment products related to US stocks, cryptocurrencies, futures, foreign exchange, etc., can all be analyzed on TradingView. After creating an account, you can use it for free; however, advanced features require payment. Let’s first familiarize ourselves with the basic interface!]
In the search bar on the homepage, search for the investment target (product) you want to find, and a screen as shown below will appear, allowing us to quickly view basic information, including recent prices, trend charts, source of the target, etc.
Click on 'Full Chart' at the top right of the trend chart to enter line chart mode (as shown below). There are many functions available in the chart, with the top row being the toolbar for adjusting different functions. The red boxes from left to right are:
1. Target Name: For example, the Bitcoin/USDT trading pair on Binance, or the DOGE contract on Huobi.
2. Compare or add products (+): Search for the targets you want to add for comparison.
3. Period: The period for each K-line chart. If you want to invest long-term, you can set it to 1 day or 1 week. Short-term investors can set it to 30 minutes or 4 hours. You need to find the most suitable number based on your investment habits.
4. K-line: You can choose other types of line charts, such as linear charts, bar charts, area charts, etc.
5. Technical Indicators: You can add up to two technical indicators (for the free version) as required by technical analysis.
Introduction to TradingView K-line Chart
The sidebar tool panel in the left yellow box contains drawing-related tools, which will be briefly demonstrated later on how to draw line charts. The observation list on the right and the latest information of the targets are similar to those on the homepage, allowing you to switch between line chart targets freely from the observation list. The middle part is the line chart itself, along with the technical indicators we added.
How to use TradingView to draw trend lines?
How to draw a trend line? Simply put, it’s connecting low points with low points or high points with high points to determine the trend.
1. Upward trend.
Find two or more low points, connect them to draw an upward trend line.
Use TradingView to draw an upward trend line.
Additionally, you can copy a line and shift it upward to a high point of the trend, which will form a 'channel' (also called a track) to assist investors in judging the timing of buying and selling. At this time, the original upward trend line below will be referred to as the 'support line', while the upper line will be called the 'resistance line'. When the price approaches the support line, consider buying; when it is close to the resistance line, consider selling.
Use TradingView to draw an upward trend channel line.
2. Downward trend.
Find two or more high points, connect them to draw a downward trend line. Shift the copied trend line downwards to form a descending channel line.
Use TradingView to draw a downward trend line.
Horizontal trend.
The market is in a consolidation phase, with no clear upward or downward trend.
Use TradingView to draw a horizontal trend line.
However, be cautious. When the price breaks through the support line or resistance line, it may indicate that this wave of market conditions is about to change, and the trend is preparing to reverse. Therefore, it is necessary to observe whether there is a quick rebound after breaking the support line; otherwise, the trend may begin to reverse into a new situation.
Teach you how to view technical indicators on Juheng website (using KD value as an example)!
After understanding how to draw trend lines, let’s further look at how technical indicators can help us judge entry timing. It’s mentioned that the free version of TradingView can only use two technical indicators, so we will use the embedded TradingView on the Juheng website to draw, allowing us to call out more than two technical indicators. First, enter the homepage of Juheng, search for the cryptocurrency in the upper right search bar, and then click on technical indicators to display the chart.
What do you associate with KD values? Is it the kill/death ratio in gaming? The KD value used for analyzing market conditions is entirely different from the KD value in games! In finance, KD value usually refers to the Stochastic Oscillator, which is a technical analysis tool used to assess the overbought (price surges rapidly and then pulls back) or oversold (price drops sharply and then rebounds) conditions of cryptocurrencies, stocks, or other assets. The K value and D value are two lines.
The K value is the fast line of the stochastic indicator, usually calculated from the highest and lowest prices over a certain number of past days to determine the relative position of the current price.
The D value is the slow line of the stochastic indicator, usually a moving average of the K value.
Simply using text to explain is not very understandable. Let’s directly illustrate with charts: After adding the KD indicator, click on the settings and change the parameters to K=9, D=3, Smooth=3. Generally, the KD value is set with these three numbers. In 'Style', you can adjust the color of the lines, and the rest can remain as default.
Expand the chart and observe carefully, have you noticed anything? That's right, the trend of the K-line chart (the main chart above) is almost identical to the trend of the KD indicator just called out.
The same applies. The blue K value and the orange D value will alternate each time, indicating a trend reversal.
When the blue K-line crosses upward from below the orange D-line, it indicates a 'golden cross', suggesting a bullish market, and you might consider buying or going long at this time. Conversely, when the blue K-line crosses downward from above the orange D-line, it indicates a 'death cross', suggesting a bearish market, and you might also consider selling or going short.
When the blue K-line crosses downward from above the orange D-line, it indicates a 'death cross', suggesting a bearish market, and at this time, you can also consider selling or going short.
Having seen this, I believe you have a basic understanding of technical indicators, and you will be more confident in investing in cryptocurrencies, rather than just blindly following others to buy and sell. However, these indicators may not always show the situations mentioned above, as the market is very complex. Sometimes, the information generated by the indicators may become unreferable due to rapid changes, and more indicators need to be combined for judgment. Therefore, continuously learning how to use technical indicators is very important! Above is the detailed content on how to draw trend lines, how to interpret KD values and golden crosses, and how to use TradingView to draw trend lines. For more information on TradingView K-line chart tutorials, please follow Liang Ge's other related articles.