Crypto-Academy Week 2 Homework by @stream4u: How To Read Candlestick Charts Written by @okoyejoshua

Hello everyone i hope is all good in your side and i hope you are staying safe so today you are going to be reading about a home work or task given by @stream4u about candle sticks in market charts, after reading the lecture and finally understood it after hours of reading i am confident that i can explain it very well.

CANDLE STICK CHART

Source

First of all what is a candle stick chart, it is just a chart that traders use to understand price action which means pinpointing where the price opened for a period, where the price closed for a period, as well as the price highs and lows for a specific period of time.

Price action gives traders in all financial market ideas to trend or reversal for example candle stick can form patterns which occur throughout crypto charts that could indicate reversals or continuation of trends. It can also form individual patterns that shows buy or sell entries in the market.

Interpreting A Candlestick Chart
You should know that there are three specific points which are (open, close, wicks) used in the process of price candles but the first points to consider in a candlestick is the open and close prices because it identifies where the price of an asset begins and concludes for a selected period and will construct the body of a candle meaning if you are looking at a daily chart each individual candle will show the open, close, upper and lower wick of that day.

Source

Green/ Blue Candlestick
When is see this colors on candles just know that the price is going up because the closing price is higher than the opening and it is also bullish for a period of time.

Red Candlestick
This shows that the price is down which means the closing price closed lower than the opening price it is called the bearish candle.

Open price
The open price shows the first price traded during the formation of a new candle meaning when the price start move upwards the candle will turn green. If the price start to move downwards the candle will turn red.

Closed price
This is the price that shows the last price traded during the period of the candle formation meaning if the price is below the open price the candle will turn red automatically but if the close price is above the open price the price will turn green or blue depending on your settings.

High Price
It shows the top of the upper wick/shadow indicates the highest price traded during the period of time meaning if there is a upper wick/shadow it means that the open price or the close price was the highest price traded during that time.

Low Price
It is opposite really because it is the lowest price it is the last price traded during the period of the candle formation meaning when the close price is below the open price the candle turns red and also If the close price is above the open price the candle will be green or blue.

The Wick
The wick is another important element of a candle stick and also can be referred as a shadow, it important because it shows the extremes in price for a specific charting period another point is the wick are very noticeable because they are thinner than the body of candlestick.

Direction
The color of the candle indicates the direction of the price meaning If the price of the candle is closing above the opening price of the candle, then the price is moving upwards and the candle would be green or blue but if the candle is red then the price just closed.

Range
It is the difference between the candle sticks when it is in it's highest and when it is it's lowest.

Time Frame
It is the period of time use to identify how the price of a particular trade is moving and every time frame has a different candle stick pattern ,there are time frames of 1 minute, 5 minutes, 15 minutes, 30 minutes, 1 hour, 4 hours, 12 hours 1 day, 3days, 1 week, and 1 month.

Now i am going to show you the candle chart of Bitcoin in different time frames which shows that it has been bullish ok lets go.

1 Minute

3o Minutes

1 Hour

12 Hour

1 Day

1 Week

1 Month

As you can see above they look different but no they are the same Bitcoin chart but different time frames.

Difference Between Support and Resistance Level

Firstly I am going to be explaining the two of them and telling you the best time to buy sell your coin.

Support
It is lowest limit a market will fall to but if it passes that limit is either it is crashing or a great pull back.

Resistance
This is the highest limit of a particular market before it meets a resistance and if it passes it that means the market is reaching a new all time high.

In that case i will say buy at support and sell at resistance so you don't loose but if you are lucky and it passes it resistance then you will make more profit anyway if you look at this chart below in a 15 minute time frame you will see what i am saying.

1inch Market

The Support in 1inch market as for now is at $4.6 or $4.8 while the resistance is in $5.5 or $5.6 that means it has not yet discovered a new all time high which means it is a Gem, not a financial advice so do your own researches.

Type of Traders

Day Trader:
This is the person who open and closes his trade within a day so their time frame will be between 1 hour to one day.

Scalper:
This is a type of trader who buys and sell his asset during a short period o time and their time frames are usually between 1 minute to 30 minute.

Swinger:
This traders a the type of people who like long term hodl because they trade in the range of days to weeks, even months. This trader usually uses the 4H time frame, daily to monthly.

Conclusion
Thanks for reading and i hope you will understand it and i hope i explained it very well Please @steemitblog and @stream4u here is my task entry and thanks for reading.

Cc:-
@steemitblog
@steemcurator01
@steemcurator02
@stream4u