#CryptoCharts101

Silent Reading in Market Movement

In the world of financial markets, stories are not told with words, but with candles. Silent candles stand on the lines of the charts, telling tales of the struggle between buyers and sellers, whispering to the insightful analyst about what is to come, if they listen well.

The Beginning: Basics of Charts

Charts are the visual language of the markets, the most famous of which are: the line chart, the bar chart, and the most used and influential: the candlestick chart.

Each candle represents a time period, revealing four secrets: the opening price, the closing price, the highest point, and the lowest point. The magic lies in its shape, as its color (green/upward, or red/downward) informs you about the state of the market, while its upper and lower wicks reveal hidden conflicts that numbers alone do not show.

Candlestick Patterns: The Market's Hidden Language

Over time, traders have learned to recognize repetitive patterns in candlestick behavior; shapes that repeat themselves as if they are the market's signatures on its decisions. Among the most prominent of these patterns:

Hammer: Appears at the bottom of a downtrend, its body is small and its wick is long, heralding the birth of a new upward movement.

Hanging Man: Stands at the top of an uptrend, indicating buyer weakness and possibly the beginning of a reversal.

Engulfing: A strong candle that engulfs the previous one, announcing the dominance of one side.

Morning/Evening Star: Patterns