If you are going to be good at trading cryptocurrencies, you need to have excellent knowledge of reading crypto charts. Crypto charts show what the Crypto market looks like. You get to see where profits or losses occur and use the information for crypto value forecasting.
With volume on one axis and cost on the other, the charts show the changes in expense. Crypto charts outline the current costs of cryptocurrencies alongside the number of units that have been exchanged. If you are into crypto trading, crypto charting will help you decide when to buy or sell.
What is the Dow Theory?
According to the Dow theory-:
• The market price is a result of the consideration of past, present, and future details.
• The present, past, and future market demands are also considered, including regulations that apply to the crypto market.
• The change in the price of cryptocurrencies is not random. It follows short or long-term trends.
• Market analysts fail to consider variables that lead to movement in price and only focus on the price of a coin.
What is Technical Analysis?
Technical analysis is a technique of predicting the future price of cryptocurrencies or stocks. The goal of this tool is to understand how the market works and even anticipate price movements.
Crypto Chart Time Frames
Price movements happen in different time frames. So, a technical analyst should consider which time frames in crypto charting they are interested in. There is s 15-minute chart, an hourly chart, a 4-hour chart, and finally, a daily chart. It all depends on how you trade, but there are two broad categories you might fall into:
Intra-day traders: This covers all those traders that open and close on the same day. If you want to purchase and sell within a single day, you fall into this category. Depending on how fast you want to trade, you can check out 15-minute charts or even 5-minute charts.
Long-term holders: Long-terms holders will hold on for weeks, months, or even years. Here, you are not quick to open and close, but you are looking at a long-term investment. The best charts for you would be the hourly chart, daily or weekly charts.
The Japanese Candlestick Charts
These is the most popular charts you will see. This type of chart is a graph including red and green candlesticks. The candles show price movements within specific time intervals. The candlesticks not only represent the closing price but only the opening price and the highest and lowest prices at a given time.
The candlestick has a body in the middle, and then shadows stick out of it. The body represents the difference in opening and closing prices. The shadows show how low or high the prices have gone in a movement. The upper shadow in the green candle is the closing price, while the lower shadow shows the opening price. The red candle is the other way round, with the upper shadow showing the opening price while the lower, the closing price.
With this type of chart, you can tell exactly where the market turned and therefore make the best decision as you trade.