Here are some examples:
1. Entering a Trade: Identifying Reversal Points
Using candlestick patterns such as 'hammer' or 'bullish engulfing' allows for identifying moments when the price may start to rise. For example, if a 'hammer' appears on the BTC/ETH chart at a strong support level, it may signal a potential upward reversal, providing a good entry point.
2. Exiting a Trade: RSI and Resistance Levels
When the RSI reaches the overbought zone (>70), it may indicate a possible correction. For example, if ETH/USDT approaches a strong resistance level and the RSI shows overbought conditions, this signals a potential pullback, making an exit from the trade a reasonable decision.
3. Using Moving Averages for Trend Trading
If the price breaks the 200-day EMA from top to bottom, it may indicate a trend reversal. For example, in the BNB/BTC pair, breaking the 200 EMA downward may be a signal to exit a long position.
4. Market Depth and Volumes
Analyzing the market depth chart helps determine liquidity. If there is a large cluster of sell orders in the order book on Binance, it may indicate potential resistance, making an exit from the trade more justified.
Conclusion
Reading charts helps traders minimize risks and find optimal entry and exit points. Using candlestick patterns, indicators, and volume analysis allows for more accurate decision-making, avoiding emotional mistakes.
