Part 1: Candlestick and Volume Charts : Summary These article series are intended for people who want to quickly learn about Technical Analysis with the focus on Cryptocurrencies. I only provide practical description and leave out the details. I use pictures from the free BitcoinCrazYness.com mobile app which provides interactive charts for quick technical analysis. Disclaimer : I am not a financial advisor. The following is not financial advice. Predictions based on technical analysis are not always correct. Do your own research before investing. The goal of Technical Analysis (TA) is to predict the future of the price and market trend by analyzing the historic data. The ultimate goal is to predict if the trend is up (AKA bullish) or down (AKA bearish). Technical Analysis is often done on candlestick charts. Candlestick Charts Each candle represents the price of the asset during a time period (e.g. 1 day or 1 hour). There are several candlestick chart styles: Standard Candlesticks (AKA Japanese Candlesticks) Each candle indicates these values: : the price at the of the time period Open beginning : the price at the of the time period Close end : the price during the time period High highest : the price during the time period Low lowest The color indicates: (or Hallow or Bullish): Close > Open Green (or Filled or Bearish): Close < Open Red What do I need to know about Standard Candlesticks? On a candle, is on the , and is on the Green open bottom close top On a candle, is on the and is on the Red open top close bottom : between open to close is called body and it is thicker Body (or Shadow): the thin parts above and below the body Wick Standard Candlesticks — BitcoinCrazYness.com Candlesticks With Trend Besides comparison of open and close values, candlestick chart with trend indicates the trend of price compared to the previous period. In this style the candlesticks are either or . Unlike standard candlesticks, the colors indicates changes in price compared to the previous period: hallow filled : Close < last period’s Close Green : Close > last period’s Close Red : Close > Open Hallow : Close < Open Filled Candlesticks with trend. The color indicates the changes compared to the previous period — BitcoinCrazYness.com What do I need to know about Candlesticks with trend? Consecutive filled or hallow candles indicate a down or up trend. Heikin Ashi The values are calculated from standard open, close, high, low values as follows: =(Open + High + Low + Close) / 4 Close = (Previous HA-Open + Previous HA-Close) / 2 Open = (High, HA-Open, HA-Close) High Max = (Low, HA-Open, HA-Close) Low Min Heikin Ashi Candlesticks. Usually has many consecutive candles of the same color — BitcoinCrazYness.com Standard Candlesticks. Compare to Heikin Ashi, it has more gaps between candles of the same color — BitcoinCrazYness.com What do I need to know about Heikin Ashi? Heikin Ashi filters out the noise and helps to spot trends Each candle opens from the middle point of the previous candle Common interpretations No lower wick: indicates strong buying pressure No upper wick: indicates strong selling pressure Two candles of a different color after several candles of the same color may indicate trend reversal Volume Chart Each bar represents the total number of trades per period. For a FROM/TO pair (e.g. BTC/USD), you can choose to see the or volume. FROM TO The colors indicate: : Close < last period’s Close Green : Close > last period’s Close Red Volume Chart — BitcoinCrazYness.com As shown in the above picture the colors are not always the same as standard candlestick colors. Common interpretations: One can use the volume and price to interpret the trend. The trend is up (Bullish) if: Volume price are going compared to previous periods Both and up Volume price are going compared to previous periods Both and down The trend is down (Bearish) if: is going , but the is going (Represented by a bar or a bar compared to the previous period in the volume chart) Volume up price down taller green shorter red is going , but the is going (Represented by a bar or a bar compared to the previous period) Volume down price up taller red shorter green See the picture below: Interpreting the trend being bullish or bearish from volume and price graphs— BitcoinCrazYness.com End of Part 1 If you liked this article please let me know in the comments. Also, please check out the free BitcoinCrazYness.com mobile app which provides interactive charts for Bitcoin and other cryptocurrency altcoins. It sends alerts on price, volume, and market cap and indicators such as MACD, RSI, and Ichimoku.
