Trading Basics for Beginners (Level 1: Chart Analysis)
If you are new to the world of trading, understanding how to read a chart is your first step toward success. Here are the 3 Essential Basics you need to know:
1. Understanding Candlesticks
Each bar on the chart represents price movement over a specific time.
Colors: Green candles mean the price went up (Buyers are in control), and Red candles mean the price went down (Sellers are in control).
Wicks (Shadows): The thin lines at the top and bottom of the candle body are called Wicks.
Long Lower Wick: Shows that buyers pushed the price back up, signaling a potential Price Increase.
Long Upper Wick: Shows that sellers pushed the price down, signaling a potential Price Drop.
2. Support and Resistance
Prices move between "Floors" and "Ceilings".
Support (The Floor): A price level where the market tends to stop falling and bounce back up. This is usually a good area to Buy.
Resistance (The Ceiling): A price level where the market tends to stop rising and drop back down. This is a good area to Take Profit.
3. Following the Trend (SuperTrend)
Always trade in the direction of the market trend.
Green Line (Uptrend): When the price is above the green line, the trend is bullish. It’s safer to hold your position.
Red Line (Downtrend): When the price is below the red line, the trend is bearish. Be cautious or wait for a reversal.
Final Advice:
Consistency is key. Never trade more than you can afford to lose and always use a Stop Loss to protect your capital.
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