Introduction
Are you new to trading in cryptocurrencies? Well, the first problem any newbie gets is reading and understanding the crypto graphs. The graph of any cryptocurrency is very complex for someone who just started trading. Register so you can understand a live graph once you get to know the basics. In this article, we will be discussing all about the graphs that we see during trading in cryptocurrency. Moreover, we will go through a simple guide that will help you predict the future of the crypto graph and help you win a lot of money.
Crypto Graph And Its Uses
Similar to stocks and other financial graphs, crypto graphs are also used to depict the ups and downs of the market. It depicts the real-time situation where the investor or the trader can use this information to make good use of their money. Almost all crypto graphs use the Japanese Candlestick graph to represent their volumes, historical price, and time intervals.
The Japanese Way
Crypto graphs use the Japanese Candlestick patterns which are long candle like figures that are present in different heights that are represented as red when the closing price is lower than the original bidding price during the day. In contrast, the candles are green when the closing price is more than the original bidding price in a day. Unlike stocks which have a limited time frame to deal in stocks with other brokers, cryptocurrencies are available 24/7 and only deal in time frames. Traders carefully examine the colour, shape, and size of the Japanese candlestick present in a crypto chart to understand the position of the crypto and invest accordingly.
Understanding Popular Patterns In An Crypto Graph
To understand crypto charts let us take a look at all the possible patterns you might see during trading and what they mean:
- Support and Resistance
Support and Resistance is the most important thing you should know about before you attempt to read the crypto charts. The support levels in a chart represent the price level of an asset so that the asset does not fall below a fixed price limit within a time frame. Whereas the resistance level in a crypto chart means that the price at which the asset is bought the prices should not go higher than that. It basically provides a barrier for the price to not go higher. This level represents when the sellers are more in numbers than buyers which means the prices will most probably go down in future.
- Bullish and Bearish Patterns
The next important thing we will learn is the Bullish and Bearish Patterns. It is a pattern that is most common in the crypto market. With stocks, we have all seen how sometimes the market crashes and a downward trend is generated. Or sometimes an upward trend is created. SImilarly in the crypto charts, we will also see these things. The upward trajectory of the chart shows that the market is in the bullish run and the downwards trend is called the bearish run.
- Shooting Star Japanese Candle Pattern
This is yet another common pattern we can observe in a crypto chart that helps traders predict the future of that currency. As mentioned above the bull pushes the market upwards which means more buyers are coming in. whereas the bear pushes the market down by selling crypto holdings. However, think of a situation where these two start fighting. This generally happens when a bear starts to run the market down anṣd bulls are waiting for this opportunity to buy some more crypto jumps in and push the market up again. This U shaped chart is what we call the Shooting Star Japanese Candle Pattern. This is the most common pattern and can be observed everyday during trading sessions. This type of pattern can help us understand the future of the chart, will it go down or if it will go up.
Conclusion
In the end, we can say that the crypto graphs are difficult for new traders however when you go through this article you will be able to understand all the basics and will be able to trade more efficiently.
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