Sirwin
Sirwin
Photo by Burak K from Pexels

The Crypto Trading Chart - A Beginner's Guide

By Gongo | Blockchain Benefits | 14 Apr 2021


Photo by Isaque Pereira from Pexels

 

If you've ever turned on the TV and flipped through the channels, I bet you've stumbled upon some sort of financial news show trying to find your favorite show.  You see the people talking on there, all hyped up about the current trends and the NASDAQ and Dow Jones... blah blah blah.  I mean c'mon, who actually watches that stuff?

Well, guess what?  You do now.  It's you who watches that stuff.  Maybe not on TV, but maybe on an exchange or price tracking app.  Especially if you are trying to figure out which crypto you're about to buy.  Especially if you get that notification from your crypto price tracker app saying your crypto has risen 11%!  If you're just starting out with zero experience in trading whatsoever, it all just looks like hieroglyphics when you're looking at that trading chart.  I was one of those people who just said "Woohoo!  Crypto!  Let's gooooo!  I've seen "Wolf of Wall Street!".  Then it was horrible trying to learn what all these different lines, bars, and candle looking things mean, all while seeing lines and numbers go up and down.  

Have no fear my crypto friends!  This blog will help you understand the terminology of your chart and shine a light (candle light?) on what these different things are. 
So, enough with the chit chat... let's start learning! 

 

Chart screenshots in this photo are from $VET using CoinMarketCap data.
Price statistics shown in fiat USD amount.  
This is for educational purposes only.  This is not financial advice. 
Please do your own research before purchasing any crypto. 
I am not sponsored by VeChainThor or CoinMarketCap.  

 

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The Chart - Price Trend Line

You see that line cutting through the chart above?  That's your trend line.  If you hover over (or tap and hold on mobile) any section of this chart on CoinMarketCap, you are able to see what the price was at a certain time and date, depending on where you select on the chart.  You are also able to view the trade volume at that respective time (either while you hover/tap and hold or you can see it as the grey area at the bottom of the chart along the x-axis).  Following the trend line will also allow you to see dips and gains, giving you a better idea of when the crypto performs better and when it does not.  Please keep in mind that the trend line is not the only factor that plays a roll in what makes a crypto perform.  

In the top right corner, you see options to view the trend line over different periods of time.  1D = 1 Day; 
7D = 7 Days; 
1M = 1 Month; 
3M = 3 Months; 
1Y = 1 Year; 
YTD = Year-to-Date, meaning the beginning of the current year until this instant; 
ALL = the entirety of the crypto's existence. 

These different options are great at seeing where the crypto value either fell or rose, and opens a door for different research points.  If you see a crypto trending at a positive rate and then it randomly dips heavily, you might want to do some digging to see exactly why this happened.  This allows you to guesstimate a good time to buy.  

On the left side (or y-axis) of the chart, you can view the price of your crypto.  Pretty straightforward here.  This is the price of your crypto, whether it be USD, BTC, USDC, etc. 

 

 

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The Chart - Market Cap

 

Similar to the price trend line, the market cap trend line juts through the middle of the chart.  This serves as the same function as the price trend line... to enable you to see the trend in market cap growth or decline.  

Hovering over the chart, you are able to see a specific date, time, the total market cap amount, and trade volume.  The trade volume is still along the x-axis, and the market cap price is on the y-axis.  It has the same period-of-time options in the top right corner as explained above. 

 

 

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The Chart - Trading View


Who else enjoys a nice bath with some candles lit?  How about these candles that can potentially earn you some cash?  How about both at the same time but now you can look at this and know what it means?  I'll take that!

Candlestick charts were always the one thing that tripped me up the most.  I mean, it looks cool and all, but what is all of this?  Let's go over some key parts!

Rather than a line going through the chart, we now have green and red candlesticks.  The green means that there was a positive impact.  The trade volume increased and the price increased!  We do not like the red (unless you want the dip).  The red means that there was a negative impact.  The trade volume typically decreases during this time and the price tends to decrease as well.  You can see this with the candlesticks throughout the chart and the trade volume with the respective time period along the x-axis.  

Along the top of the chart, you see a whole bunch of different letters.  Let's focus on the letters "O", "H", "L", "C".  No, this isn't another crypto abbreviation, so please calm down! 

"O" = Open;  price of crypto when trading period opens

"H" = High;  highest price of crypto during the trading period

"L" - Low;  lowest price of crypto during the trading period

"C" = Close;  price of crypto when trading period closes

You can choose to view these different periods either or different day-parts, days, weeks, and months.  This chart is helpful to assess the volatility of your crypto.  But how?

It shows either increasing or decreasing momentum.  The more far apart the open and close are, the greater momentum.  If they are closer together, this could mean that participants are a bit more indecisive on buying or selling, showing weaker momentum.  If you are looking for the patterns, keep an eye on the green candles.  This means people are rallying to purchase the crypto at higher costs due to increased demand.  If you see the green, cue the register noises (cha-ching!).  

You're probably also wondering what the thicker part of the candle is.  The bottom of this part is where the open price was marked.  The top, you guessed it, is the close price.  The thin lines sticking out from the bottom and top are both the lowest and highest prices respectively.  

 

 

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The Chart - Price Statistics

The final stretch.  You're about to be a pro at reading your chart!  Now, you're looking at this and wondering, "Great, now I have to read even more of what this guy is going to say.  I'm going to be here all day (or night)!"  You're good!  I'm literally going to bullet list this information with terminology explanation.  To understand why a few of these matter when it comes to buying your crypto, check out my other blog here on Publish0x.   

  • Crypto Price - this is the current updated price of your crypto.  
  • Price Change (24H) - this is the dollar amount that your crypto either increased or decreased within a 24-hour period, followed by a percentage of increase or decrease.
  • 24H Low / 24H High - this displays the lowest low and the highest high price of your crypto within a 24-hour period.
  • Trading Volume (24H) - this is the overall trading volume from the last 24-hour period, followed by a percentage of increase or decrease. 
  • Volume / Market Cap - this displays the percentage of volume to market cap ratio (ie -  on the screenshot above, Volume / Market Cap is listed at 0.2225.  This means that our of the entirety of the market cap for the crypto, 0.2225, or 22.25%, is being traded at this time).
  • Market Dominance - this is the percentage your crypto contributes to the market as a whole, out of 100%.
  • Market Rank - this number is your crypto rank based on the market cap compared to other cryptos.  This is ranked in order from highest market cap to lowest. 
  • Market Cap - this is the total number of coins mined multiplied by the current price of the coin.  This can be calculated at any given time. 
  • Fully Diluted Market Cap - this is the market cap amount if all of the coins or tokens in the supply were completely and fully issued. 

 

 

I know this article is a little lengthy, but I am sure you can understand why.  Reading the different trading charts and data is crucial to your success if you want to become a crypto holder and be profitable from it.  Take the time to check out the trading charts for different cryptos to see if you can figure out the momentum and trends for yourselves!  If you are about to buy, please also check out my blog here that I mentioned above.  I go through my top 4 picks on what I look for when choosing a crypto.  Of course, I am not you, so I always beg you to do your own research as well before taking a leap and spending any money.  I am just a crypto enthusiast trying to educate the public on crypto news and topics I wish I had when I was trying to figure all of this out.    

I hope this article helps each and every one of you get a little better understanding of what these charts mean.  I also hope this makes you a little more confident in your abilities to read and actually understand what is going on here!  Until next time! 

 

 

Thanks so much for reading! 
Please feel free to follow my page for daily blog posts about crypto news, updates, and research! 
Have a wonderful day! 

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Gongo
Gongo

I like to write about anything crypto! If you are also on Hive/LeoFinance, give my page a follow at leofinance.io/@cryptosota!


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