The “candles” are made up of bodies and wicks.Ī body represents the open price and closing price in a candle’s timeframe. There are just five things you need to know to read a candlestick chart: A typical candlestick chart, wicks and all ( Image source) The chart that he invented, somewhat like a bar chart and a line graph combined, elegantly captures these bullish / bearish trends that are used to predict future price movements. Honma taught that within each bear and bull market are the seeds of its opposite, manifesting the ancient Chinese concept of yin and yang (yin = bear market yang = bull market). What does an 18th century Japanese rice merchant have to do with crypto? Well, the candlestick chart, a type of chart that’s frequently cited by crypto traders, is purported to have been invented by a man named Munehisa Honma, a rice futures trader and author of the first book on market psychology.
For now, we provide a surface overview of three common charts and trendlines to help you make sense of it all. There are countless introductory books and online guides to technical analysis, many of which now contain “cryptocurrency” in the title to attract its newest converts. “A technical analysis strategy may work for a certain trader and fail to yield results for another due to differences in application, discipline, etc.” “The accuracy of technical analysis comes down to the makeup of the analytical strategy and the ability of the trader to adhere to its core principles,” writes technical analysis blogger Navdeep Singh. We won’t get into it here, but if you don’t have the slightest background in finance you may be wondering: can simply studying charts accurately predict prices? The answer is yes and no.
The field of study that examines price trends and patterns is formally known as technical analysis. Thankfully, just a little bit of homework can go a long way. To the uninitiated, however, trying to divine something intelligible from these visuals can be as foreign as reading tea leaves. Those who keep a close eye on prices, whether they’re trading or not, relish the opportunity to share screen grabs of price charts to foretell one coin or another’s eventual fate. Disclaimer: The following is for informational purposes only and should not be construed as financial advice.
0 kommentar(er)
