When I started crypto currency trading, I realized that this can’t be a wild guess game. Honestly speaking, I was always interested in figuring out patterns in almost everything around me since I was a kid. So I was happy to find out that there are charts available and patterns identification techniques too.
However, many websites and tools offering charts analysis for crypto currency related exchanges are not up to the mark. Infact almost all of them lack basic elements needed for chart and pattern analysis.
Note: I’m coding my own charting script and will make it public soon.
Bad charting websites:
Don’t get me wrong, they might be very good in someone elses view, or yours too. But I found them quite basic or lacking many pattern and chart analysis scripts and stuff. We don’t just need the main graph and keep guessing on our own regardnig what’s gonna happen next!
The websites that I don’t recommend to be used (will keep adding as I find more bad scripts and websites):
- Tradingview
- bitcoinwisdom
Good chart analysis website
The best charting script I’ve found is on cryptowat.ch
No I don’t trade via kraken (who acquired cryptowat.ch). Neither did they pay me to advertise them here.
Example view of cryptowat.ch that I usually use (I do change themes time to time to keep it fresh and interesting).
Note the indicators and overlays that I’ve turned on.
I do turn others on too, the sideview tabs too, time to time. Depends on what I’m looking for.
The most important indicators are following in my opinion, so keep them turned on.
Important indicators for Chart Analysis and Pattern prediction
First we’ll see the important indicators that I use on cryptowatch (there are more, some are not available on cryptowatch too, so helpless in that one!)
- Volume
- MACD
- RSI
- Aroon (7)*
Note that I mentioned the settings value 7 for Aroon. This is variable. Sometimes I set 14, sometimes more or less. Depending on various factors and the time limit of the chart (e.g. 1 minute, 1 hour or so on).
For an easy tip, set the Aroon at 7 or 14 and see if all the past Aroon indications go perfectly with the main chart’s rise and fall. If it does, then probably you’ve set the right value for Aroon indicator.
Note: Remember to learn these indicators in DETEAIL. Starting from their definition. Know everything about them. EVERY SINGLE THING.
Basic Technique for Chart Analysis
Honestly, chart analysis is such a vast and variable technique that I can’t compile it in a simple or basic form.
However I can give you some basic tips which can help you get started, as we build up more stuff on this website and learn together, helping you and me both to improve our chart analysis and pattern recognition techniques.
Follow these tips and techniques for now:
- Study all length charts for the item that you’re trading. E.g. see and follow 1 minute, 3 minute, 5 minute, 1 hour, 1 day and so on, as many of them are available. Please don’t assume that any of them would be similar to other one or you already know what they look like. They don’t. Look at them. Repeatedly.
- Plan your strategy on the maximum size chart. E.g. the Daily or weekly chart.
- If you’re day trading, then learn what day trading is first.
- If you’re day trading, make your strategy based on maximum available chart first, then come down slowly to 1day chart, then lower gradually up to the 1 minute chart.
- Make lines on the chart.
- Make lines on the chart.
- Make lines on the chart. (it wasn’t a typo, was intentionally repeated thrice to give it importance).
- Day trade with 1/3rd or 1/2 of the total cryptocurrency or any other stock that you’re trading. Keep the remaining on the long term strategy line only.
And the last and most important trick:
Get over yourself
The crypto or trading world isn’t running around you or against your. You’re not a hero you’re not a villan. You’re just another person who’s doing what all other people are doing. So don’t overestimate yourself, neither underestimate yourself. Don’t estimate yourself at all, just estimate and analyze the chart and identify the pattern.
Let me know if you have any questions through comments. I’ll reply and update this post as needed. And add more posts too.