🕯️ Chart analysis for beginners: How to understand candles and indicators

Hello, friends! If you are just starting your journey in the crypto world, the view of the trading terminal with its constantly moving charts may seem like a complex code. But in reality, this is the language the market speaks to us. Today, we will cover the basics of candlestick analysis and key indicators that will help you make informed decisions.

1. Japanese candles: The foundation of foundations

Japanese candles are the most popular way to display price. Each candle shows what happened to the price over a specific period (for example, over 1 hour or 1 day).

  • Candle body: If it is green, it means the price has risen. If it is red — it has fallen.

  • Wicks (shadows): Thin lines at the top and bottom show the maximum and minimum price that the asset reached during this time. A long lower wick often signals that buyers are actively "buying" the dip.

2. Key candlestick patterns

To begin with, you don't need to learn hundreds of patterns. Focus on the most understandable signals:

  • Hammer: A candle with a small body and a long lower wick. If you see it after a long decline, it often means that the sellers' strength has exhausted and a reversal upwards is possible.

  • Doji: A candle where the opening price is almost equal to the closing price (looks like a cross). This is a sign of uncertainty in the market: neither buyers nor sellers can take the lead. Often, after a doji, there is a sharp movement in one direction.

3. Indicators: Your assistants in analysis

Indicators help confirm what we see on the chart. Here are two of the most useful for beginners:

  • RSI (Relative Strength Index): This is the market's "thermometer". It shows values from 0 to 100. If the RSI is above 70, the market is "overbought" (too many purchases), and a correction may begin. If it is below 30, the asset is "oversold", and the price may rise soon.

  • Volume: The bars under the chart show how much money has passed through trades. If the price rises on high volume — this is a strong signal. If the price rises while volume falls — the movement may be false.

4. Golden rules for beginners

Analysis is not magic, but working with probabilities. Always start looking at charts from larger timeframes (daily or 4-hour) to see the big picture. Smaller charts (1-minute) often create "noise" that confuses beginners. And remember the main rule: never ignore Stop-Loss to protect your capital from sharp movements.

💡 Summary: Understanding candles and basic indicators is your foundation. The more you practice reading charts, the clearer the market logic becomes.