The latest peak trends in cryptocurrency is enabling thousands of beginners to trade every day. Many of which does not even really understand candlesticks or the trading at all and just go with the flow. We want you to understand the that trading is a lot different from gambling.
In gambling you just select your lucky number and wait to get lucky or lose all of your money while in trading, its all about technical knowledge and most of the time its basic mathematical calculations combined with common sense which we believe everybody can learn. So, here we are explaining the basic candlesticks for cryptocurrency trading beginners.
If you have recently started your trading journey and you want to understand candlesticks for beginner follow till end we try to explain this in simplest way possible and will try to make you a successful trader by the end of this blog.
You must have see this chart everywhere you are trading and its very common if you are wondering, what are these lines with the option of strange indicators that does not make any sense. Lets start with the very basic of candlesticks and how to read them. If we remove every indicator from this chart than this simple one will remain.
This is the simple raw data know as NAKED PRICE ACTION. This is the most important information for any trader that tell you about what price is doing at any given period. All the indicators you will see below were taken from this raw data. You will observe that the chart is made of a lot of individual candlesticks.
Basic Candle Sticks
These are the individual candlesticks. On the left we have green candle which represents the Bullish candle which simply means that the price is increase over the certain period and on the right we have the red candle which represents the Bearish Candle which means that the price has decreasde over the certain time period. Time period is the period of a fully form candle. If you have set the time period for 15 mins than each fully formed candle will represent the price movement within the 15 mins similarly a daily chart will show the each candle movement of one complete day.
The fat rectangular part of these candle sticks is real body which shows specific price action of the opening and closing price. So, for the Bullish candle the opening price is at the bottom of candle and the closing price is at the top of the candle. While the bearish candle is inverse as it is displaying price decrease.
The vertical lines at the top and bottom of the real body is known as Shadows, Wicks or Tails. It tells about the highest and lowest price at any given time period. This is a very valuable information for any trader.
The other one you often see with in the same chart is doji candlesticks. These candles have little or no real body. Dojji Candle tells you that the price is open or closed at the very same or near the opening price.
These were the basics to read the candlesticks.
At first circle you can see the Bearish Candle Sticks which are responsible to move the market downward.
At the second circle there is doje candle.
Lastly, Bullish Candlesticks which are responsible for moving market upward or increasing the price.
ABIDEA will come up soon with the series of reading candlesticks pattern for profit and loss. Follow us, if you wish such basic lecture for trading.