Technical Analysis Guide for Beginners

This article is a beginner's guide to technical analysis. It walks you through the process of adding technical analysis to a completely fresh chart, step-by-step.

Step 1: Accessing Your Trading Screen

Access your trading screen by logging into your trading account. Most professional crypto trading screens are similar, so as long as you use a reputable exchange such as Binance or BuyBit, you should be fine.
Once you are logged in, you will come up to the top where you can trade the spot or derivatives. Choose the market you want to trade and then select the asset you want to trade.

Step 2: Adding Candlesticks to Your Chart

Click on the candlesticks option to add it to your chart. Candlesticks provide more information on which session was either an up session or a down session. If you zoom in, you can see that the green candlesticks indicate an upward move for that session, while the red candlesticks indicate a downward move for that session.

Step 3: Adding Trading Volume to Your Chart

Adding trading volume to your chart will give you an idea of how the trade is moving. When you have huge moves, there is usually a spike in volume. This is good for traders because it tells them what's happening.

Step 4: Adding Moving Averages to Your Chart

Adding moving averages to your chart will give you a great idea of where the price is now compared to the general trend. You can choose a short-term moving average (e.g. 20-period moving average) and a longer-term moving average (e.g. 200-period moving average).

Using these moving averages as trading levels during a bear market and a period of selling will help you determine the market's direction.

To identify potential trading levels and predict price movements, traders use support and resistance levels, which are areas of value on a chart where the price trades up or down. These levels are learned over time and can help traders make informed trading decisions. For example, 30,000 is a key level of support for Bitcoin as it has bounced off this level multiple times in the past. Traders can use trend lines to identify these key areas and take profits or enter orders accordingly.

Relative Strength Index (RSI) is another indicator that traders can use to measure the strength of a move in comparison to past prices. When the RSI is low, it signals that the price may be oversold and traders can potentially enter a long position. However, it is important to note that these indicators should not be relied on solely and traders must understand their limitations.

To learn more about identifying support and resistance levels and using technical analysis in trading, I will be uploading articles related to technical analysis in trading and indicators.

Using RSI as an Indicator for Trend Reversals in Trading

Traders often use indicators to determine trend reversals or confirmations in trading. The RSI is a popular indicator that can provide useful indicators for traders. When looking at the RSI and price, it is important to consider the current trend and market conditions. For example, during a bear market, the RSI may indicate that a move is overbought and due for a reversal.

1. Look at the price trend and current market conditions.
2. Use the RSI as an indicator for trend reversals or confirmations.
3. During a bear market, an overbought RSI may indicate a move is due for a reversal.

Using the RSI in this way can help traders to make informed decisions about when to enter or exit a trade. It is important to note that there are many other indicators available, and traders should consider using multiple indicators for a more comprehensive analysis.

Thank you for watching.
Happy trading!