Initially, I will explain some basics that you will need, and then I will move on to the steps of technical analysis:
1. Choose the currency you want to analyze
In the Binance platform, you can search for the currency by typing its symbol (like SOL, BNB, etc.) in the trading search box.
2. Open the price chart
Once you select the currency, click on 'Trading View' to display the full chart that contains the necessary tools for technical analysis.
3. Set up the chart
You can customize the chart by clicking on 'Indicators' to add essential analysis tools such as:
Candlestick charting: is a method of displaying prices that visually shows price movements through the shapes of candles.
Technical indicators: such as Moving Averages, Relative Strength Index (RSI), and other oscillators that will assist you in the analysis.
4. Price Pattern Analysis
Look for candlestick patterns such as Doji and Engulfing Patterns, as these patterns indicate potential trend reversals.
Doji Candle: appears when the opening and closing prices are very close together, indicating indecision in the trend.
Bullish or bearish engulfing candle: indicates the possibility of a trend reversal when seeing a strong candle that engulfs the previous candle.
5. Support and Resistance Analysis
Identify support and resistance levels on the chart, which are areas where the price has previously bounced. These levels help you anticipate entry and exit points.
6. Use momentum indicators
You can add the Relative Strength Index (RSI) or MACD indicator to determine the momentum of the currency and see if it is in an overbought or oversold condition.
7. Volume Analysis
Make sure to follow the trading volume; when the volume is high with price movement, it may indicate the continuation of the trend.