When I first entered the crypto world, looking at the screen full of red and green fluctuating candlestick charts was really overwhelming. Those up and down 'candles' seemed to be saying something, but I couldn't understand it at all.
Later I realized: candlesticks are actually the language of market sentiment.
What we need to do is not to predict the future, but to learn to 'understand' what these lines are saying.
The basic knowledge of candlesticks is actually easy to understand. A green candlestick represents an upward movement, while a red candlestick represents a downward movement. The longer the body, the stronger the direction of this candlestick; the length of the upper and lower shadows represents the opposing buying and selling forces at that time. A long upper shadow indicates heavy selling pressure; a long lower shadow indicates strong buying.
As you delve deeper into learning, you will encounter more indicators, such as the MA moving average, which helps us determine the trend direction of prices. If the short-term moving average crosses above the long-term moving average, it is called a 'golden cross,' often indicating a potential price increase; conversely, a 'death cross' may indicate a weakening in the short term.
For example, the RSI indicator can tell us whether the market is overheated or overcooled. When the RSI is above 70, it may indicate that the price has risen too much, and caution is needed for a pullback; below 30 may indicate that the price has dropped too much, presenting a chance for a rebound. The crossing above and below of the MACD is a common trend reversal signal, while the Bollinger Bands tell us if the market is about to 'change face.' When the Bollinger Bands' opening narrows, it is the calm before the storm.
Trading volume is also crucial. A breakout with increasing volume is a real breakthrough; while a decline with decreasing volume is often an emotional reaction and may not necessarily indicate a genuine drop. Market sentiment is actually hidden behind every candlestick, just like the 'Fear and Greed Index' states: when everyone is panicking, it is often an opportunity; when everyone is greedy, one should be cautious.
There are also some more advanced tools, such as Fibonacci retracement lines, ATR volatility, OBV money flow... They are not essential to master, but once you learn them, you will be more confident in judging support and resistance.
This sharing does not encourage you to trade frequently, but hopes that you can walk the path in the crypto world without 'walking with your eyes closed.'
Trading has never relied on luck, but on understanding, which starts with knowing how to read a candlestick.
If you are also exploring this path step by step, may these experiences be helpful to you.
