How to read candlestick charts to trade coins on Binance?

EducationAugust 23, 2021

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How to read candlestick charts to trade coins? Candlestick charts are often called Japanese candlestick charts, candlestick patterns… This article will learn how to read a trade coin candlestick chart to improve the efficiency of cryptocurrency trading.

How to read candlestick chart in trading coin

What is a candlestick chart in the trading coin?

Candlestick charts commonly used in trading coins are also known as Japanese candlestick charts. The Japanese candlestick pattern is used to record price movements. Candlestick charts are widely used in forex, stock, and cryptocurrency markets.

Candlestick charts often include many different candles. Each candle will display the price corresponding to 1 period of that chart.

E.g.:

  • When you are looking at the daily chart, each candle is the price of one day. The last candle showing is the price of the day you are viewing the chart.
  • Similarly, when looking at the 4H chart, each candle is the price of 1 consecutive 4-hour period. The last candle is the price of the hour at that time and 3 hours before.
How to read candlestick charts to trade coins 2

BTCUSSDT 1-day chart, each candle represents the price of 1 day.

By default, a green candle normally represents a bullish price, meaning that the price at the end of the upcycle is relative to the price at the beginning of the cycle. Conversely, a bearish candle is red, meaning that the price at the end of the cycle is lower than the price at the beginning of the cycle.

The structure of a candle in the candlestick chart

To better understand the structure of a candle, let’s learn about the prices displayed in a candle. Each candle will include a candle body and a shadow.

  • The body of the candle is the part that is green or red.
  • Candlestick shadows are 2 small sticks located at the 2 ends of the body of the candle.
  • The top of the upper shadow is the highest price in that candlestick period. The low of the lower shadow is the lowest price in that candlestick period.
  • The body of the candle is made up of the opening and closing prices. With a green candle, the opening price is lower than the closing price at the candle period (the closing price is above due to the rising price). The candle is red, the price at the opening is higher than the closing price at the candle period (the opening price is above because the price is falling).

candlestick chart

E.g.:

  • If you use a 1-day chart, the price candle on June 23, 2021, has the opening price at 00 hours on June 23, 2021, and the closing price at 23:59 on June 23, 2021.
  • Similarly, if you use the 1-hour chart, the price candle at 10:00 a.m. on August 23, 2021, has an opening price at 10:00 a.m. on August 23, 2021, and a closing price at 10:00 a.m. on August 23. 2021.

Where to see the candlestick chart in the Binance exchange?

To see the trading coin candlestick chart, you can use the chart available on the Binance platform or view the chart through analysis tools, monitoring cryptocurrency prices such as Tradingview, Coinmarketcap …

How to see the trading coin candlestick chart on Binance, you do the following:

Step 1: Log in to your Binance account. If you do not have an account, you can open an account by following the link below:

* See more: The complete guide Binance from a to z

Step 2: Click Trade on the toolbar, then select [Classic] or [Advanced].

How to read candlestick charts to trade coins 4

Next, enter the name of the coin pair in the search box in the right corner of the screen and select the coin pair you want to see the chart:

5 How to read candlestick charts to trade coins

The center area of ​​the screen will now show the candlestick chart of the coin pair you selected above.

  • Click on the small triangle on the top of the chart to select the time frame you want to see the chart.
  • Click on the double-headed arrow to expand the chart view.

6 How to read candlestick charts to trade coins

How to read candlestick charts to trade coins

To read a trade coin candlestick chart, you need to understand some of the meanings of each candle. The longer the body of the candle, the larger the difference between the opening and closing price of that period.

If there is a long green candle, the cycle has the stronger buying power, increasing significantly. On the contrary, if there is a long red candle, the cycle has stronger selling power, so the price drops sharply.
Similarly, the green candle body is short, showing that the buying power is weak, so the price increased slightly. It is possible that at that time, the sellers tend to want to dominate. And if the red real body is short, it shows that selling is weak, and maybe that’s when the buyers outnumber the sellers.

5How to read candlestick chart in trading coin

When there is a clear trend in the cryptocurrency market, there are often many long green candles stacked in a row, and only a few short red candles appear to form resistance levels, meaning the market. There is a powerful buying force at that time, and the buying force will likely be stronger after that. When selling prevails, the long red candlesticks will stack up continuously, and occasionally a few short green candles will appear to form a resistance level to continue to fall further.

Above are some of the most basic knowledge on how to read candlestick charts for trading coins on Binance effectively. To read charts and apply them to trading, you need to learn more about identifying support and resistance levels, identifying price trends, and common price patterns in the cryptocurrency market. We will explore this knowledge together in the following articles.

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