Alright guys.
How's it going?
It's Austin with the Crypto Playhouse here and recently, we've been getting a lot of
demand on reading charts and how to get into trading.
The first thing to trading is learning how to read your crypto charts.
So today we're gonna dive in.
We're gonna take a look at Bitcoin, Ethereum, Litecoin charts and we're gonna give you just
kind of a quick, simple way to jump in and know what you're actually looking at when
you get into trading on these exchanges.
[opening music]
Alright, so I know this is a episode about analyzing crypto charts, but before I even
get into the charts themselves, I wanna address an issue I see a lot of beginners making this
mistake and is easy to do if you don't know what you're looking at, but it's gotta be
addressed.
So, if you're looking at this chart here, you should not be making your buys and sells
based off what you see on the chart.
Down here on Bittrex, you've got your order book, alright?
On the left here, we've got bids, so that's what everyone is offering to buy that certain
cryptocurrency at.
On the right, we have the asks.
People that are selling their cryptos.
In this case Bitcoin.
That's what they're asking for their shares.
Now, you've got your sub-total, size...ignore all that.
We're not even gonna pay attention to it for now.
The first thing you really wanna look at is just simply the big or the ask.
And basically, this is an active feed of everyone that's trading on that market at any given
time.
It's going to be telling you what their asking price is for their buy or their sell.
You should always be making your market orders based off of what's actually coming into the
feed, not what you're seeing on the chart.
What you're seeing on the chart is averages.
You can really, really put yourself in a bad spot if you're trading without watching the
order books.
So first things first, remember you gotta watch that feed.
You gotta see what the actual realtime prices are.
And the other thing is really before we get into the candles and the bars and all that,
is volume.
I see a lot of people that are trading without considering their volume.
That is really a key factor in trading.
You see right here, we've got some low volume going on and you see the volume picking up
just a bit, but as you can see a lot of people would see these larger candle sizes and they
might like to trade on those larger candles just because they see a big difference in
the price; but as you can see over here, we've got a huge candle, lots of price differential
in there.
A lot of potential for profit, but we have very low volume.
See you have to consider the volume of the trades at any given time when you're looking
at your charts, because if you have a huge candle that's gottta big price spread, you
might think, �Wow, this is a great time to jump in!
I could make some good money!� But if it's very low volume and there's not many market
orders coming in, you might end up sitting there waiting for somebody to buy your order
and it might never happen, because of that low volume.
So, you can't just look at the charts.
You can't just look at volume.
You gotta take all of this into consideration when you're analyzing things.
So, I've showed you guys Bitcoin just for the order book and for the volume, but Bitcoin
is one of the more steady cryptos.
It is volatile, but you know, it's the most secure out of the different ones in terms
of price flux, so we're gonna move over to Ethereum and we're gonna show you guys a way
to look at bars.
Now, I only start with bars because I really thing that it is the simplest way to get an
introduction into what you're looking at.
So, right here we're looking at a 15-minute time cycle and let's take a look.
We'll start with the green that is indicative of an up cycle, so this little left out cropping
bar here.
That's the opening price.
That means that the beginning of that 15 minute cycle, that is what the first order placed
on the books came in at.
Now, same goes to the right side.
The right side is the closing price.
Very simple, so that's what your bars are showing.
You've got open on the left.
Close on the right.
Green is obviously an uptrend bar.
Red, it's going down.
Now, we're gonna take a look at this bigger red bar here cuz it tells you a little bit
more.
Now, one of the advantages, but also disadvantages to bars, is that it does show you your peak
and your bottom prices here, so analyzing this bar, we're gonna look and say, alright,
it opened at $460.90 and this is where it comes in here and the top price that that
sold for during that period was $462.68.
Now down here we've got our bottom and selling price, which was $455.14 and then once again,
it came back up here and it closed out right around $458.
So with these bars, you get an open, you get a close and you get a top and a bottom price.
Now one of the disadvantages to getting that top and bottom price with bars is it's very
vague.
You just know where the top and bottom was, but you don't know where the bulk of the orders
were coming in from and that's really where we get into candles and why a lot of people
prefer to use candles over bars.
So now we're gonna move over and we're gonna take a look at Litecoin.
Once again, we're doing 15-minutes cycles just for ease, but you're basically dealing
with a very similar setup, green is an uptrend, red is a downtrend, but instead of giving
you an open and a close price, you're mainly looking at averages, which in reality, is
much more telling than just seeing that top and bottom.
So for a great example, we're gonna start with this little green candle here.
Now this long skinny part that's coming out of that candle, that's what's called your
�wick.� Now, the bottom of that candle itself, that is where the majority of your
trades for that 15 minute cycle were occurring.
Now, that's important because even though you've got this long wick, a lot of people
if they were looking at bars, they would have seen that as the same density as everything
else, so if you go in and you're trading on that wick, you do have a little bit more of
a chance to make more money, but you also have a greater chance for loss because those
are really outliers.
There's only a few others being put onto the market that are actually being picked up and
completed.
So, as I said, this is your body here and that's where your averages are and then, as
you can see here, we've got $100.77 is the peak and $100.64 at the very bottom of that
body, so really you're dealing with a 13 cent range for the majority of those trades, but
if you were looking at bars you would see this whole thing and that goes all the way
up to $102.50.
So even that wick reaches $102.50 that maybe 3 to 10 orders that actually managed to get
in and out.
So when you're trading candles and you're just starting off, it's best to stay in that
body and avoid the wicks if you wanna play it safe.
Now, as I said, just like the bars, green is an uptrend, red is the downtrend, so once
again we're gonna move over here and we're gonna take a look at this red candle here.
So, we got the original, the first downtrend beginning here and as you can see, it was
on an uptrend coming into this.
You got green candle, green candle and it was still going up as you can see by this
wick here to about $102.32, but the downtrend started and the majority of these orders were
coming through in the body of that candle.
Now, as the downtrend continues through, you can see we've got a downward facing candle
with a much longer wick.
Now, one of the things that's nice about candlesticks is those wicks can show you kind of a range
of volatilities, so you know, when you're on a downtrend, if you see a very long candle
wick in the downward direction, you're probably looking at a continuing downtrend, but as
you can see, the next one actually picks up a little bit and that candle...the candle
wick is the same length as the next one.
So once again, when you're first starting off, you just wanna trade on those bodies,
but the wicks can give you a little bit better of an eye of what direction the general trend
is moving in.
Ok, so I hope you guys enjoyed this kind of first look at how to analyze your Bitcoin
and altcoin charts.
We will have a video coming out pretty soon.
We sat down with our money manager and we wanted to get something set up for you guys
on how to really get started with a the true trading and get a simple setup that can give
you some basic analysis tools that will put you a little bit ahead of the crow.
So keep your eye out for that and if you like the Tradingview charts, I highly suggest getting
the professional version.
I have myself have purchased it.
We got a link down on the bottom.
You can follow that and it'll show you how to get things set up.
And we wanan hear from you guys.
Do you just the Tradingview overlay when you trade.
Do you use candles.
Do you used bars.
Are you a fan of the Heiken-Ashi.
Leave us a comment and if you liked the video, subscribe to the channel and give us a like.
[closing music]