RE: Crypto Academy / Season 3 / Week 2 - Homework Post for [@reminiscence01]―Introduction to Charts

Hello! Steemians, I am @masumrbd. In Steemit Crypto Academy Season-3, Week-2 is running. Now, I am writing my homework task about "Introduction to Charts" for professor @reminiscence01. Let's get started:

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Explain the Japanese Candlestick Chart? (Chart screenshot required)

Japanese Candlestick Chart is a technical analysis tool invented in the 18th century by a Japanese rice trader whose name is Munehisa Homma. Steve Nison, a technical analyst first introduced them in his book "Japanese Candlestick Chart".

Japanese Candlestick Chart is used to do technical analysis. Technical analysis is to predict the future price by looking at the movement of the market. There are two types of candles. One is green and the other is a red candle. Two candles signify two different conditions of the market. A green candle means the closing price is higher than the opening price at any given time in the market. In this case, we have to assume that the market is in uptrend condition. Again, a red candle means the closing price is lower than the opposite opening price of a green candle. This means that the market is in a downtrend condition.

^{Illustrated by @masumrbd}

A candle is made up of a body with an opening and closing price above and below the main body. The green candle has a closing price and an opening price. The red candle has an opening price at the top and a closing price at the bottom. There are two wicks above and below the body. The upper wick's top position indicates the high price and the lower wick's top position indicates low price in a certain time frame.

Describe any other two types of charts? (Screenshot required)

Many more charts are used for technical analysis. From that, I am describing by choosing two charts. In this case, I chose the Line chart and Bar chart.

Line chart

The line chart is very simple and easy to use. The line consists of only the closing prices of a coin within a certain period of time. It is not a complete chart because it only indicates the closing prices in the market within a certain period of time.

Most of the time daily basis traders use this line chart. In fact, traders would like to prefer other charts because opening, high and low prices of a coin are missing in this chart.

Above you can see KNC/USDT line chart within a 1-hour time frame. The closing prices make this bullish and bearish line.

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Bar chart

In a bar chart, we can know about 4 prices of the market which is more informative than the line chart. The bar chart represents the opening, closing, minimum and maximum price. There are two types of bars in this chart, green and red color bars. Green bars represent uptrends in the market and red bars represent downtrends in the market.

Above you can see KNC/USDT bar chart within a 1-hour time frame. Green and red bars simultaneously shows uptrend and downtrend condition in the market.

^{Illustrated by @masumrbd}

The line to the left represents the opening price and the line to the right represents the closing price. The lowest part of the bar represents the minimum price and the highest part represents the maximum price.

In your own words, explain why the Japanese Candlestick chart is mostly used by traders.

The Japanese Candlestick chart is mostly used by traders. There are many reasons behind this. I will try to cover them one by one:

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• Japanese Candlestick chart is simple and easy to understand besides this it covers detailed information regarding to market.

• It covers 4 information in one candlestick the opening, closing, low and high prices.

• Two colors of candlesticks represent two meanings, the green candle mean uptrend and the red candles mean downtrend.

• Calculation of price movement is essential in technical analysis. Two uptrend and downtrend candles make this is easier for a trader.

• Market entry and exit points can be easily identified by using Japanese candlesticks.

• Other indicators can easily be used with these Japanese candlesticks and get good signals making is very easy.

Describe a bullish candle and a bearish candle identifying its anatomy? (Screenshot is required)

Bullish candle

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A bullish candle is represented by green color. Looking at the trend of a green candle in the market, it is understood that the demand for that coin has increased in the market. Then the buying pressure is created and the market continues to go uptrend. The bullish candle has an opening price below and a closing price above.

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Bearish candle

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A bearish candle is represented by red color. Seeing the trend of a red candle in the market, it is understood that the supply of that coin has increased in the market Then selling pressure is created and the market continues to go downtrend. The opening price of the bearish candle is above and the closing price is below.

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^{Illustrated by @masumrbd}

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Explanation of different parts in a bullish and bearish candle.

Open: This point represents the opening price of a coin market within a certain period of time.

Close: This point represents the closing price of a coin market within a certain period of time.

Low: This point represents the lowest price of a coin market within a certain period of time.

High: This point represents the highest price of a coin market within a certain period of time.

Conclusion

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I learned charts, Japanese candlesticks, bullish and bearish candles from the lesson. During completing my homework I also learn the bar and line charts. There were questions that helped me learn a lot of the unknown by researching online.

Charts play a major role in trading. If you don't understand the charts well, you can't do coin analysis. Investing in coins without analysis means gambling. So today's lesson is very important for those who are involved in cryptocurrency or any trading.

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Best Regards,
@masumrbd