In the blockchain and crypto market, in addition to understanding the basic concepts and meanings of terms, global financial trends and the situation in various countries around the world are also news that crypto people need to update every day, because these news or knowledge will eventually become a series of red or green line charts. If you want to understand it, you must learn some "technical analysis" knowledge. This way, you can use the strength accumulated from knowledge to predict the trend of the crypto market, understand the trend line charts, and get ahead of others!
Welcome to the special program "Technical Analysis for Beginners" of NONE LAND.
After experiencing the first program "A Beginner's Guide to Technical Analysis! Interpretation of Six Technical Indicators and Crypto Market Trends", I believe everyone knows the importance of fundamental analysis, technical analysis and line charts. Although technical analysis is easy to learn but difficult to master, if you know more than others, I believe you can grasp the opportunities faster when the line chart fluctuates and benefit from it.
However, it's easy to say, even if beginners know that technical analysis is really important, it's useless because "how to get started" or "where to look at the situation" are very confusing for beginners. I know you are worried, but don't worry, let NONE LAND use this article to break down the meaning of each line chart and term and how to understand them. This time, the editor is using the OKX App, let's take a look at how to use it!
Understand the market before understanding the line chart
First, open the OKX App, click on Bitcoin (BTC) in the mainstream currency menu, because it is the most mainstream cryptocurrency in the crypto world, so you can click the star in the upper right corner to add it to your favorites. Next, it's a practical and must-spend time to understand the meaning of the terms!
- BTC / USDT: This means that 1 Bitcoin can be exchanged for how many USDT. In the example below, 1 Bitcoin can be exchanged for 68,404.3 USDT, it is indeed the real big brother of the crypto world! You can also directly search for other currencies on the homepage.
Don't know what USDT (stablecoin) is? I recommend you read:
- Market: This is like looking out the window and seeing the "current weather conditions". You can see the changes in the current market, such as which currencies are rising or falling in price, and the trading volume, so you can quickly understand the market status.
- Overview: It's like opening the "instruction manual" of a product, allowing you to grasp the basic information of the cryptocurrency at a glance, including market capitalization, market ranking, etc. This is a good tool for beginners to quickly understand the current situation of the currency.
- Data: If "Market" is the weather condition, then "Data" is not only the weather record of the past few days, but also the detailed reasons and trends of the weather changes. These data can help you understand the operation of the market and the driving factors behind it in more depth. There are also a few terms that I can explain to you.
(If you just want to simply understand the line chart, you can temporarily skip the term explanations sorted by ABCD below, it will not affect the subsequent understanding.)
A: Fund Flow Distribution: Imagine you are observing the foot traffic of different stores, this indicator tells you where the funds are flowing to cryptocurrencies. Cryptocurrencies with more capital inflows usually mean that people have more confidence in them.
B: Net Fund Flow: Just like the increase and decrease of people in the park, the net fund flow shows the fund flow of the trading pair within a unit of time. If the funds continue to flow in, it may indicate an upward trend in prices, and vice versa (it can also be said to be a symbol of investors fleeing).
C: Leverage Long/Short Ratio: This indicator tells you how many people are betting that the price will go up (long) or down (short). A high long ratio indicates a bullish market sentiment, and vice versa.
D: Leverage Long/Short Volume: This indicator shows the amount of cryptocurrencies borrowed or lent. High borrowing volume may mean that the market has stronger expectations for the trend, just like I expect Bitcoin to rise, so I "borrow money" to buy Bitcoin.
- Trading: In the crypto world, in addition to the basic "spot" buying and selling of cryptocurrencies, there are also more advanced trading methods, such as "perpetual", "delivery", and "options (BTCUSD T-type quote)". These terms are slightly different from the general understanding of "buying" and "selling", and I can also give a simple explanation to everyone.
A: Spot: This is the most common trading method, which refers to the immediate buying and selling of cryptocurrencies, and you can immediately transfer the actual cryptocurrencies you bought to your wallet. It's like going to the market to buy apples, you pay the money and immediately get the apples.
B: Perpetual: This is a contract transaction without a fixed expiration date, you can buy and sell contracts to bet on the rise or fall of the currency price, but you don't actually hold the cryptocurrency. However, this method is more suitable for experienced people, because you can use leverage to amplify your profits or losses, you may become rich overnight, but of course your account may also be wiped out while you're having dinner.
Don't know what a contract is? I recommend you read:
Crypto earning magic weapon? Understand "Contracts" in one article, a must-know for crypto newbies!
C: Delivery: This is a contract with a fixed expiration date, you can also bet on the rise and fall of the price, but you must settle or close the position when the contract expires. It's a bit like signing a future trading agreement, and when the agreed time comes, you must fulfill this agreement.
*Delivery is a common term in the stock market, referring to the process of exchanging money and goods after a stock transaction is completed
D: Options: This is a financial derivative that allows traders to buy or sell an underlying asset, such as Bitcoin or Ethereum, at a specific price in the future. You can choose to go long or short. Of course, options are a relatively complex trading method, so remember to DYOR (Do Your Own Research) before entering the market to effectively protect your money.
- Copy trading: Here, many experts (traders) share how they open positions, and they also allow you to follow their trades - when they buy, you buy, and when they sell, you sell. This is a good "learn from the masters" method for beginners.
- Strategies: This helps users use automated trading plans, allowing them to execute buy and sell orders based on preset conditions. This way, even if you don't constantly monitor the market, you can still achieve your trading goals, like grid trading, which is a strategy.
Below the "Strategies" section, there are the highest and lowest crypto prices, trading volume, and trading amount for Bitcoin in the past 24 hours.
Don't know what a futures grid bot is? Recommended reading:
Afraid of the high risks of futures? You must not have heard of the "futures grid bot"!
Chart time frame options
These options can help you observe different price trend charts, like zooming in or out to see the overall market.
- 15min: Observe the price chart for the last 15 minutes, suitable for short-term traders.
- 1h, 4h: Give you a wider range of fluctuations, suitable for observing market changes within a day.
- 1D: Observe the daily price chart trend, suitable for medium to long-term investors.
- More: Provides more time frame options, allowing you to choose more flexibly.
- Indicator settings: You can add different "tools" to help analyze the price chart trend, similar to adding filters to see the details more clearly.
* In the crypto world, the green chart line usually indicates an increase, and the red line indicates a decrease, the opposite of the Taiwan stock market.
Next, the red and green chart lines may look a bit dazzling, but each chart line can be clicked to display the details of that line, so you can take a closer look.
Introduction to technical analysis indicators
These indicators can help you understand the "hidden information" in the market. By using different indicators, you can confirm that your ideas and chart trends are consistent. Some technical analysis indicators are more suitable for beginners to interpret and learn.
- VOL (Trading Volume): This is the most important "popularity indicator" chart, indicating the trading volume within a certain time period. The larger the trading volume, the higher the attention on that crypto.
- MA (Moving Average): This is the "average price line" chart, helping you see the average price of a crypto over a period of time, letting you know if it is steadily rising or falling. This chart can more intuitively show the medium to long-term trend of the market. We can judge whether to buy or sell by observing the crossover of short-term and long-term moving averages.
In the figure above, the numbers show MA5: 67,888.1, MA10: 67,607.4, MA20: 64,850.9, where 5, 10, and 20 represent the number of days, that is, the average closing price of the past 5 days, 10 days, and so on.
These MAs can help us observe the price trend. For example, when the short-term moving average (such as MA5) crosses above the long-term moving average (such as MA20), it is usually seen as a buy signal; conversely, when the short-term moving average crosses below the long-term moving average, it may be a sell signal.
- EMA (Exponential Moving Average): is a more sensitive technical indicator chart than MA, because it assigns a higher weight to the latest price changes. It can respond to trends faster than MA, so it is very popular with short-term traders.
- MACD (Moving Average Convergence Divergence): Although the Chinese translation is quite complex, MACD is actually used to measure the difference between two different periods of exponential moving averages (EMA), which can reflect market changes, and is an indicator chart that beginners are relatively easy to grasp.
When the two EMA lines approach each other, the chart trend may slow down or reverse. This state is called "convergence", but if the lines move away from each other, the trend may strengthen, and this is called "divergence".
- RSI (Relative Strength Index): The RSI chart can be used to measure the strength of the price relative to its past movements, ranging from 0 to 100. Generally, RSI above 70 indicates the market may be overbought, and RSI below 30 indicates the market may be oversold. We can rely on this chart to judge whether the market is about to reverse.
The RSI chart also shows RSI6, RSI12, and RSI24, which also represent the number of days, based on the price changes of the past 6 days, 12 days, and 24 days, respectively.
In fact, there are many other types of technical indicator charts, but the above are the ones that beginners need to understand the most. Start with the basics, or you may really want to give up (experienced advice).
Want to learn more about charts? Recommended reading:
What is the depth chart?
Finally, we've arrived at the last section of the article. If you've made it this far, give yourself a round of applause. This is also a chart that can simply understand the market sentiment.
The X-axis represents price, arranged from low to high from left to right.
The Y-axis represents order volume, with the height indicating the amount of buy orders or sell orders within a certain price range.
Buy orders: On the left side of the depth chart, these represent orders from investors who wish to buy the asset at a lower price. The color is usually green.
Sell orders: On the right side of the depth chart, these represent orders from investors who wish to sell the asset at a higher price. The color is usually red.
The depth chart, a line graph, shows the quantity of orders placed at different price ranges, directly reflecting the market's liquidity. If the buy or sell order volume is large in a certain price range, it indicates significant support or resistance at that price. We can analyze the trend of the line chart to understand investors' buying and selling intentions, gauge market sentiment, and identify support and resistance levels.
Want to learn more about support and resistance levels? Recommended reading:
The information and technical analysis indicators provided above are based on the OKX App line chart. We hope this helps those new to the colorful world of line charts!
If you've made it this far, you must be a very dedicated person. If you'd like to learn more about crypto, line charts, technical analysis indicators, or investment knowledge, as well as the basic principles of blockchain, please continue to follow the official NONE LAND Instagram community to stay up-to-date on the latest tutorials and news!
( * The content of this article does not constitute any form of investment advice. All investments carry risks, so please research and consider carefully before deciding! )
〈Can newbies understand line charts? Technical analysis isn't as difficult as you think, let me demonstrate it directly〉 This article was first published on《NONE LAND》.
