First understand two core indicators
In the crypto space, candlesticks and trading volume are the legs you must hold tight! The former looks at price fluctuations, the latter looks at market heat, both are essential~
What exactly is a candlestick?
Simply put, it's a candlestick chart, each one looks like a small candle, allowing you to see rises and falls at a glance:
Red (or green, depending on the platform settings) = rise, the longer the more vigorous
Green (or red) = fall, the longer the more disastrous
What is hidden in a candlestick?
Upper shadow: like a candle flame, the top is the highest price during this period
Lower shadow: like the base of a candle, the bottom is the lowest price during this period
Body: the thick column in the middle, with the ends being the opening price and closing price
Time dimension can be adjusted: 1 minute, 5 minutes, 1 day... short term looks at small cycles, long term is more reliable with daily and weekly charts~
12 common candlestick patterns, understanding them gives you an edge over 90% of beginners!
1. Doji: looks like a 'cross', indicating a battle between bulls and bears with no clear winner; appears after a big rise may signal a drop, after a big drop may signal a rise, not useful during sideways movement
2. T-line: long lower shadow, looks like a 'T'. Appears at a low = possible rebound, appears at a high = possible drop, during a rise = may continue to rise
3. Hollow body bullish line: has a body and a lower shadow, no upper shadow. Appears at a low = may start rising, appears during a rise = continue to be bullish
4. Hollow body bearish line: has a body and an upper shadow, no lower shadow. Indicates a strong upward trend, but there is some pressure above
5. Hollow body bearish line: drops from the open, pulled back a bit at the end (with a lower shadow). Indicates support at the bottom, possible rebound
6. Solid body bearish line: drops all the way down, no lower shadow. Appearing at a low may indicate a rebound, but the strength is likely weak
7. Hollow body bullish/bearish line: no upper or lower shadows, pure body. Bullish line = very strong upward trend, bearish line = very strong downward trend, likely to open high/low the next day
8. Small bullish star/small bearish star: ultra-short body, rise and fall almost invisible. Indicates the market is stagnant, hard to say how it will move next
9. Small bullish line/small bearish line: body a bit longer than the star, fluctuation 0.6%-1.5%. Bullish line = weak rise, bearish line = insincere drop, don't chase blindly
10. Medium bullish line/medium bearish line: longer body, clearer signal. Bullish line = bullish, bearish line = bearish, likely a turning point!
11. Large bullish line/large bearish line: fluctuation over 3.6%, super obvious! Bullish line = upward trend dominates, likely opens high the next day; bearish line = downward trend dominates, likely opens low
12. Hammer line/inverted hammer line:
Hammer: lower shadow is 2-3 times the body, at a low = buy at the bottom, at a high = sell at the top (this is called a hanging man)
Inverted hammer: long upper shadow, at a low = possible bottom, at a high = possible top, wait for the next candlestick to confirm
How to make money with candlesticks?
Observe trends: a series of candlesticks moving up = upward trend, moving down = downward trend, horizontal = consolidation
Combine indicators: look at moving averages, MACD together, accuracy doubles
Find buy/sell points: when reversal patterns appear (such as a low hammer), combine with other signals before acting
Finally, key points! Pitfall guide
Don't rush just because you see a large bullish line! It may be a trap to lure buyers
Remember three phrases:
a. Bullish signals ≠ will definitely rise
b. Bullish ≠ buying now is correct
c. Buying at the right time ≠ will definitely profit
Keep following SOPH ENA S QKC TREE
