Reading Charts

Candlestick charts provide detailed information about price movements within a specific time period:

• Each candlestick represents a specific time period (e.g., 1 day, 1 hour)
• The "body" shows the opening and closing prices
• The "wicks" or "shadows" show the high and low prices
• Green/white candles indicate price increase, red/black indicate decrease

Line charts offer a simple view of price movements over time:

• Shows closing prices connected by a line
• Provides a clear view of overall price trends
• Less detailed than candlestick charts, but easier to read
• Useful for identifying support and resistance levels

Bar charts provide a middle ground between candlestick and line charts:

• Each bar represents a specific time period
• The vertical line shows the high and low prices
• The left tick represents the opening price, the right tick the closing price
• Provides more information than line charts, but less cluttered than candlesticks

An uptrend is characterized by higher highs and higher lows:

• Look for a series of ascending peaks and troughs
• Confirms bullish sentiment in the market
• Often presents opportunities for buying or going long

A downtrend is characterized by lower highs and lower lows:

• Look for a series of descending peaks and troughs
• Confirms bearish sentiment in the market
• Often presents opportunities for selling or going short

Support and resistance levels are key price points where the direction of a trend may change:

• Support: A price level where buying pressure is expected to overcome selling pressure
• Resistance: A price level where selling pressure is expected to overcome buying pressure
• These levels can act as barriers to price movement
• Breakouts above resistance or below support can signal trend changes