Trading 101

Trading 101

Trading 101

Charts and Data.

Great! It’s time to learn when to buy and sell to make profits. To perfect this you need to understand charts and data.

Knowing when to buy and sell is tough. Every trader wants to know that. It’s what the game is all about. Don’t worry, we’ll guide you through the process.

To do it properly you need an idea of what is happening to the market price. For this, you will need market data and charts. TradingView.com provide the most advanced charting tools and is also the charting engine of choice on iCE3X.com

For beginners, this is a good independent chart source: https://bitcoinwisdom.com/

Firstly, there are three types of charts, generally, when trading.

  1. Line charts (simple, but have the least information).
  2. Bar charts (good, but become a haze after a while).
  3. Candlestick charts (preferred by most traders. We’ll deal with these).

Candlestick charts give you the maximum information, in a minimum amount of space.

Candlestick Explanation

An individual candlestick says 4 things.

  1. Open and close price.
  2. How high the price went, and dropped to, during the time-frame.
  3. Green candlestick = price closed higher than the opening. Red candlestick = price closed lower than the opening.
  4. The upper / lower shadows indicate the difference between the high, the low, the open and the close.

From that, we can see that a chart that is mainly green and headed upward indicates we are in a bullish (up) trend. Whereas a chart that is mostly red, and headed downward, indicates a bearish (down) trend.

Each bar is a time-frame. On a 10-minute chart, each bar represents 10 minutes. For short-term day-trades use charts from 1 – 30 minutes. For longer-term trades, you will need charts from 1 hour+. Ensure your chart is adjusted properly. It can be very costly if you don’t.

You should also view charts in context; that means you need to look at the price and then take the volume traded on the market during that period into account.

Volume Explanation

Volume is an essential factor to consider. Even if the price goes up, with little volume to support the rise, it will likely fall again. A price rise with a high volume is more likely to indicate a bull trend. Volume can also indicate the price trend. A green volume bar signifies an upward trend and the opposite is true for a red bar.

And lastly, watch the order book.

Order Book Explanation

The order book consists of 2 elements: Bids and Asks. Bids are how much traders are willing to pay for Bitcoins. Asks are the prices which traders are willing to sell bitcoins for. An order book tells you how much support the current trend has. Some charts visually represent the depth of the order book which is a great indication of where market sentiment is at or the direction it is moving.

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