Understanding Candlestick Patterns and Their Benefits in Crypto Assets

Armfalcon.com, JAKARTA — Indodax CEO Oscar Darmawan said investors understand various patterns of crypto assets. Investors, according to him, need to become DYOR (Do Your Own Research) and also understand fundamental analysis such as studying whitepaperread news about crypto to be purchased, see the community and others.

Apart from that, investors also need to understand technical analysis, namely how to understand candlestick patterns. “There is Candlesticks investors can see the price activity of a crypto. In market Indodax, investors can see price activity from time frame 1 minute, 5 minutes, 15 minutes, 1 hour, 4 hours, 1 day, 3 days, 1 week,” he said in a written statement, Thursday (20/4/2023).

Oscar said candlesticks investors can see information about the opening price, closing price, highest price, and lowest price. By being proficient at reading candlestick movements, investors can get an overview and important signals whether the crypto they want to buy or sell is likely to go up or down.

“That way, investors can make the best decision to buy and sell crypto assets,” he said.

The first thing investors need to do when starting to study candlesticks is that investors need to pay attention to the red and green candlesticks. The red color indicates a decrease in price and the green color indicates an increase in price.

“The green candle indicates buying momentum, the bottom of the candle shows the opening price and the top shows the closing price,” he said.

While the red candle is the opposite. The bottom shows the closing price and the top shows the opening price. After investors understand this most basic technique, then investors need to know the bullish reversal candlestick pattern (where this candlestick pattern can predict a price increase) and the bearish reversal pattern (where this candlestick pattern can predict a price decline.

To find out if crypto signals are going up, there are several bullish reversal candlestick patterns that investors can study, including the Bullish Hammer Pattern, where there is a green candlestick with a wick below the body of the candle. This pattern is shaped like a hammer, and indicates that the bearish pattern has ended and has reversed to become bullish.

Second, the Bullish Engulfing Pattern, there is a green sequential candlestick at the end of a downtrend. When compared to the red candle on the left, this green candle will be taller than the red candle

The third is the Morning Star Candle Pattern, where there is a small (red or green) candlestick between the red candlestick and the large green candlestick. If an investor sees this pattern, it indicates that a price increase signal is about to start.

The Four Patterns Three White Soldiers, where this pattern is quite different from the three patterns above. As the name implies, investors stick to three candles green in color where the candle is shaped like a ladder going up with the size of a long flat candle body. If investors have seen this, then this indicates a fairly strong crypto buy signal.

To find out if the crypto signal will go down, there are several patterns bearish reversal candlestick that investors can learn, namely:

First, the Three Black Crows Pattern, where this pattern is the opposite of the three white soldier pattern where investors stick to three red candles, the candles are shaped like stairs going down.

Unlike the three white soldiers, investors also need to pay attention to two candles the last red has the open in the middle candlesticks earlier and lower closing price than candlesticks first red.

Second, patterns Hanging manwhere this pattern is the opposite of the pattern bullish hammeris candlesticks red with the axis below the body of the candle. This pattern is shaped like a hammer and indicates the bullish pattern has ended and turned to bearish.

The third is the Shooting Star pattern, which is similar to the hanging man pattern. The difference is only the axis that is above the body candles shaped like a red inverted hammer.

Fourth, the Bearish Harami Pattern, where this pattern indicates a decline in prices. The red candle is small where the candle and axis are no longer than the previous green candle.

To understand candlestick patterns, it takes a long time. However, Oscar saw that by learning this candlestick pattern, investors could really understand how to trade and could reap profits. Indodax has an educational channel on line a free app called Indodax Academy which functions to provide education about crypto and blockchains with deep and clear discussion.

“Understanding candlestick patterns does have some advantages, but actually this pattern has drawbacks, namely graphics from charts that don’t work well when applied to small timeframes. Our Indodax has timeframes of 1 minute, 5 minutes, 15 minutes, even up to 1 week. If investors want to apply this pattern, it is better for investors to wait closing candles on a 4-hour timeframe, which is 30 minutes before the switch candlesticks so candles What is formed is final,” he said.