In cryptocurrency trading, using candlestick charts to determine entry timing is a fundamental technical analysis skill. The following are suitable entry methods using candlestick charts for beginners, simple and practical:
1. First understand the trend: If the direction is correct, entering the market won't be frantic.
- Upward trend: Continuous appearance of multiple bullish candles (green), with each closing price higher than the previous one, indicating strong buying pressure, suitable for finding opportunities to go long.
- Downward trend: Continuous appearance of multiple bearish candles (red), with each closing price lower than the previous one, indicating strong selling pressure, suitable for waiting or finding opportunities to go short.
- Trend reversal signals: Hammer, inverted hammer, morning star, engulfing patterns, and other special candlesticks often appear at trend turning points and can serve as entry references (e.g., a hammer appearing during a downward trend may signal a rebound).
2. Identify support and resistance levels: Lock in a safe entry range.
- Support level: When the price repeatedly falls to a certain range and then rebounds, this is the support level. If the price approaches the support level and a bullish candlestick (such as a hammer) appears, consider going long.
- Resistance level: When the price repeatedly rises to a certain range and then retreats, this is the resistance level. If the price approaches the resistance level and a bearish candlestick (such as a hanging man) appears, consider going short.
3. Volume-price coordination: Confirm whether the market is 'genuine'.
- Increasing volume during an upward movement: Indicates strong buying power, making the trend more reliable; going long at this time is more prudent.
- Increasing volume during a downward movement: Indicates strong selling power, and the trend may continue; going short at this time is more appropriate.
(Conversely, if the price moves but the volume does not follow, it may be a 'false trend', requiring caution.)
4. Remember a few practical candlestick patterns: Beginners can quickly recognize them.
- Hammer: Appears at the bottom of a downward trend, with a long lower shadow (at least twice the body), suggesting the downtrend may end, consider going long.
- Inverted hammer: Similar to the hammer, but with a long upper shadow, often appearing at the bottom, also a potential long signal.
- Three white soldiers: Three consecutive bullish candles, each closing price higher than the previous highest price, indicating strong upward momentum; consider buying.
- Bullish engulfing: A long bearish candle followed by a short bullish candle (the bullish candle completely within the bearish candle body), suggesting weakness in the downtrend, potential rebound; consider buying with a small position.
5. Combine simple indicators: Make signals clearer.
- Golden cross of moving averages: Short-term moving average (e.g., 5-day) crosses above long-term moving average (e.g., 10-day), forming a 'golden cross', indicating possible price increase, suitable for going long.
- MACD golden cross: In the MACD indicator, the short-term line crosses above the long-term line, and the histogram changes from green to red, indicating strengthening bullish momentum; consider going long.
6. The final step: Implement risk management.
Always set a stop loss before entering the market! The stop loss point can be set below the key support level (when going long) or above the resistance level (when going short); once it is breached, exit to avoid significant losses.
For beginners, there is no need to pursue complex analysis. First, thoroughly understand 'trend + support and resistance + volume-price', then gradually combine candlestick patterns and indicators; entering the market will become increasingly stable. Remember: More important than precise entry is not to operate blindly; act only after understanding.