Reading cryptocurrency charts is an essential skill to possess if a person is planning to trade their cryptocurrency efficiently. The numerous crypto charts and bulk of data can all become very overwhelming for a person. Especially for those who just entered the complicated world of crypto. All the buzz words and concepts come off as something new for them. There are many terms that a person who wants to start trading will encounter in their career. There are a few that they must be familiar with before they dive into the crypto realm.
Beginners might find it hard to learn and understand crypto charts. Learning the technical analysis, or knowing all the terminologies related to it can be complicated. They can find it to be a very challenging task. This article discusses the ways of how to read crypto charts. It will make it easier for the users who are constantly trading crypto assets or for someone who is merely holding It. Reading a graph has many benefits. It will help traders to keep up with the crypto market trends and know the prices of a certain coin at any time.
What’s technical analysis?
While dealing with crypto trading, the trader must know how to conduct technical analysis. This skill comes in handy on many occasions. It can be for a specific asset or for the entire crypto market. It adds a lot of value and profit to one’s trading strategies. What is the definition of technical analysis? It can be defined as a skill that determines the opportunities the crypto assets have to offer for the trader. It also helps in evaluating the price of a coin. For this to happen, the trader must know how to analyze crypto charts. Also, they should know how to observe the asset trading activity and go through its logistics and statistics.
The main objective that technical analysis targets are the trade volume and asset price. Unlike its counterparts, which targets the crypto asset concerning business strategies. This method usually ends up presenting short term strategies and signals. Although, as a bigger picture it can also help by giving a broader analysis of the market’s strengths and weaknesses.
The technical analysis might not end up giving the trader a reliable long term strategy. However, there is no doubt that it does a good job in helping the user make their choices quickly. These choices are based on what they have noticed about their asset of choice. Dealing with a highly volatile market, fast decisions are a big advantage which depicts the importance of technical analysis.
Japanese candlestick charts
A Japanese candlestick chart, which is also referred to as the “Trader’s Choice” is a better and advanced version of the line chart. The features that make it a better alternative is that it gives the user information about not just the closing price. But things like highest and lowest prices, market cap volume, etc are also explained. This crypto exchange rate makes it easier to study the closing price. It uses colors to label them. Typically, a green bar represents a higher closing price. A red bar will showcase a lower opening price. It also gives its user the option to zoom in or out or alter the timeline view. These features are not present in a line chart. The string detail that a Japanese candlestick inculcates in it helps the trader in getting an overall picture of how the coin of their choice is performing in the crypto market.
One of the best advantages that a trader gets with cryptocurrency is that they allow them to trade digitized currency. They do not limit it to fiat currencies. To read a Japanese candlestick chart, a trader should know that the red and green candlesticks represent the price change. This price change occurs with a specific asset within a particular time interval. Whereas, the wick is an indication of the highest and the lowest price of an asset in a selected period. One way to keep this in mind is that the candle body indicates the gap between the open and close prices. On the other hand, the wicks show the ups and downs in the prices.
Traders typically prefer to utilize this crypto exchange chart because it gives a more targeted and detailed overall technical analysis. This further helps them with planning trades and predicting the next price. Charts are a way to get a slight insight on what the price of a coin will be. However, it is still impossible to know exactly what the price might reach or fall to in the future. However, running a thorough analysis on Japanese candlestick charts can surely help you in running more successful trades.
What are support and resistance?
In simple words, support and resistance can be defined as a way that helps the trader to plan out their next trading strategy. It can be based on the price ranges between the given levels. These work by dominating the highest or the lowest price that an asset attains while the predicted period.
Hence, support is the price point at where the downtrend is most likely to stop and start again. Primarily because of the increment in demand and interest of the crypto asset. Resistance works the opposite from this. It is a price level where the uptrend is expected to rebound whereas the asset price drops.
These price levels typically give the traders a good entry and exit point. So, the traders can reap the most benefits and advantages from their assets. This works for both short and long strategies. Furthermore, it allows the trader to place bets on whether the trend will continue or rebound. These bets can bring high profits if the correct guess has been made. In case a trader loses, there will only be a minimal loss.
How to read cryptocurrency charts in 7b App?
The 7b app provides a thorough and detailed analysis of the crypto market through charts and graphs. Through elaborative Japanese candlestick charts, the app highlights every important market detail for its users. The users can assess the performance of an asset through the candlestick chart. They need to analyze the opening, closing, highest and lowest points marked on the chart. These charts are relatively easier to interpret than the traditional line and bar charts.
In the 7b app, traders should examine the body of the candlestick representation to get an idea of the competitive buying or selling nature of the asset. The longer the body is, the more intense is the market competition.
The coloring of the charts may also vary. However, generally green represents an increase and red represents a decrease in the value from the starting point. The user-friendly interface of the 7b app makes reading crypto charts easier. This ease will help in making faster decisions and plan out future trading strategies by predicting the prices of an asset.
Therefore, if a trader reads crypto charts thoroughly in the 7b broker app, there is a high chance for them to conduct more profitable and sustainable trades.