Basics of Crypto Charts for Beginners
Understanding crypto charts, especially candlestick patterns, is essential for making informed entry and exit decisions. I'll walk you through the basics and key strategies using candlestick patterns. Let's break it down step-by-step:
🔍 1. Basics of a Candlestick
Each candlestick represents price movement over a specific time frame (e.g., 1 minute, 1 hour, 1 day). It includes:
Open: Price when the candle starts.
Close: Price when the candle ends.
High: Highest price during that time.
Low: Lowest price during that time.
Green (or White) Candle: Price went up.
Red (or Black) Candle: Price went down.
📈 2. Common Candlestick Patterns for Entry/Exit
Here are some of the most reliable patterns:
✅ Bullish Patterns (Entry Signals)
1. Bullish Engulfing
A small red candle followed by a large green one that engulfs it.
Signal: Reversal from a downtrend.
2. Hammer
Small body, long lower wick.
Appears after a downtrend.
Signal: Possible bottom, time to buy.
3. Morning Star
Three candles: red → small candle (doji) → large green.
Signal: Strong bullish reversal.
❌ Bearish Patterns (Exit Signals)
1. Bearish Engulfing
A small green candle followed by a large red one that engulfs it.
Signal: Reversal from uptrend, time to sell.
2. Shooting Star
Small body with long upper wick.
Appears at the top of an uptrend.
Signal: Likely top, exit soon.
3. Evening Star
Three candles: green → doji/small candle → large red.
Signal: Strong bearish reversal.
🔷Conclusion
Enter when:
A bullish candlestick pattern (e.g., Hammer, Bullish Engulfing, Morning Star) appears near a support zone.
There’s confirmation of a higher low, indicating an uptrend.
Volume and momentum support the breakout or reversal.
Exit when:
A bearish candlestick pattern (e.g., Shooting Star, Bearish Engulfing, Evening Star) forms at or near a resistance level.
Price starts making lower highs or lower lows, signaling a trend reversal or weakening momentum.
Risk-reward ratio has been reached or the stop-loss is triggered.
📌 Final Tips:
Use candlestick patterns with other indicators (like RSI, moving averages) for higher accuracy.
Always trade with a plan: define entry, exit, stop-loss, and risk-reward before entering a trade.
Good Luck❤️🤞