When a beginner opens a trading terminal, the first thing they see is the chart. But charts also have their own language. Let's figure out how to understand it correctly.
1. Line Chart
The simplest type of chart.
Displays only the closing price for each period (for example, for an hour or a day).
Good for general understanding of the trend: is the price rising or falling.
Minus: little information — it's not clear what happened inside the period (for example, whether there were sharp jumps).
2. Bar Chart
Each bar shows 4 prices for the period:
Open — the price at the beginning of the period
Close — the price at the end of the period
High — the highest price
Low — the lowest price
Provides more information than a line chart.
3. Japanese Candles
The most popular format in crypto and trading.
Each candle also represents 4 prices: Open, Close, High, Low.
Candle body: shows the difference between opening and closing.
Candle color:
Green → the price rose.
Red → the price fell.
Shadows (wicks) show how far the price deviated from the body.
Example:
Long upper wick → the price was pushed up, but it was 'pressed down'.
Long lower wick → the price was dropped down, but it was quickly bought back.
What is important for beginners
Candles and bars provide more information than lines.
Lines are good for the 'big picture', candles are for details.
To understand the market, you need to get used to seeing the mood of the players in the candles: who is stronger — buyers or sellers.
Conclusion: candles are the primary tool for a trader. This is what you will work with in technical analysis.
