🕯️ Crypto Chart for Beginners: How to understand Candles and Indicators?

Are you confused when looking at the chart on Binance? Don't worry, that's normal in the beginning! The red and green bars you see are called the Candlestick Chart. It serves as our "map" to understand where the price of crypto is heading. Here’s a basic guide for newbies so you won't have to guess.

1. What do Candlesticks mean?

Each candle shows the price movement within a specific time (for example, 1 hour or 1 day). Each candle has two main parts: the 'body' (the thick part) and the 'wick' (the part that resembles the wick of a candle at the top and bottom).

  • Green Candle (Bullish): This means the price has risen. The closing price was higher than the opening price. This indicates that more people want to buy.

  • Red Candle (Bearish): This means the price has dropped. More people sold than bought during that time.

The 'wicks' tell us how high or low the price reached before it stopped. When there is a long wick at the bottom, it is a sign that there are "buyers" who caught the price.

2. Basic Candlestick Patterns to Watch

There are candle shapes that give us a "clue":

  • Hammer: It looks like a hammer with a long wick at the bottom. When you see this after a long price drop, it could be a sign that it is about to rise again.

  • Shooting Star: This is the opposite of the hammer. It has a long wick at the top. This is a sign that the price might soon drop because the buyers have exhausted themselves.

3. Volume: The "Strength" of the Market

At the bottom of your chart, you will see vertical bars. This is the Volume. It indicates how much money is entering and exiting. If the price is rising and the volume is high, it means the movement is "real". But if the price is rising while the volume is low, be careful because it might just be a "fakeout" and suddenly drop.

4. RSI (Relative Strength Index): Hot or Cold?

The RSI is one of the most popular indicators for beginners. Think of it as a market thermometer measuring from 0 to 100.

  • Overbought (Above 70): The market is too "hot". Too many have bought, and it might be time to take profits because the price could drop.

  • Oversold (Below 30): The market is too "cold". Too many have sold, and this might be the right time to buy because the price is "cheap".

5. Don't forget Risk Management

No matter how good the chart looks, nothing is 100% certain in crypto. The analysis is just our guide. Always use Stop Loss to protect your capital. Don't get carried away by emotions or the "hype" of others. Study first before diving in big.

💡 Conclusion: Reading the chart is like learning a new language. At first, it's difficult, but with continuous practice, you will master it too! Use the candles and indicators to make smarter decisions in your trading.