Understanding Candlesticks Chart Basics for Newbie Traders

Candlesticks Charts Basics 

Many atimes people get confused about the charts 😏😏 what's all this bars that we are seeing. In a nutshell this trading charts you do see in exchanges otherwise known as candlesticks is a graphical representation of what is happening in the order books (Buy and Sell Order). The price movement you normally see in the order books is what is reflecting on the charts of a particular cryptocurrency pair.

On the chart you see green and red bars it is called candlesticks what you need to know about it is simply this: the green candlesticks represent buying while the red ones represent selling for you to be able to understand where the green candlesticks starts from is just taking a close look at it.

When traders are buying the green candlesticks start reading from the bottom to the top so when people are buying you see the green candlestick growing up, showing increase in the price which is often referred to as bull or bullish meaning positive price movement.

But when people are selling the candle stick turns to red and start reading from top to bottom, going down and showing decrease in the price referred to as a bear or bearish that is a negative price movement.

Each candlesticks represent time intervals for both buying and selling. The way Poloniex and other exchanges like Bittrex arranges their own chart gives you an oppurtunity to see how a cryptocurrency pair have been faring for some period of time. If you go to the chart area of the exchange you are using you should be able to see a zoom option that allows you to see the chart of the last 6hrs, 24hrs, 2 days, 4 days, 2 weeks, 1 month and all time.

Assuming you want to see what happens in the chart let say the trading details for the past one month just click on one month in the zoom option and it will give you an overview of what has happen for the past one month like this one below.

Candlesticks charts showing upward trend

Using the chart in the picture above which is a one month chart with a 4 hours candlesticks you can see that there's an upward trend on it, the chart alone can go a long way to help you in your decision making.

The candlesticks in chart like I said represent intervals if you see the picture below I clicked on the one month chart with a one day candlesticks meaning it gives me a daily interval of what has been happening for the past one month so the candlesticks you see in the picture below both the green and red ones they represent 1 day each if you count it the total sum of the candlesticks will amount to 30 which is a representative of one month.

1 month charts with 1 day candlesticks intervals 

Likewise if you want to see what has happened more than a one year or maybe when the coin was launched it will also be indicated on the chart you can use the Scroller to zoom and adjust to a particular point that you want to analyze.

It is in cryptocurrency DNA to fluctuate hardly before you see a stable coin because the price is basically determined by buyers and sellers so there's this zig zag motion that you see in the chart it's called volatility and beneath that volatility is where the money is and how you make profit. So been able to interpret and understand the chart can give you an idea of when to buy and when to sell to make profit which is a difference between your entry point and exit point.

This is basically what you need to know about the chart if ou want to dig deep in to the advance part then you can make use of the resources I have provided below

Resources

1. Introduction to Candlesticks [ChartSchool]

2. The 5 Most Powerful Candlestick Patterns

Hope this helps.

Important: Articles, opinions, or any other information posted on this blog does not constitute investment advice. Never invest money you can't afford to lose. Always do your own research before placing a trade. 

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