For beginners, the world of cryptocurrency looks like a maze with numerous charts and numbers floating around. People who do not have any prior experience in trading with stocks and shares find it much more difficult to understand the same. It is good to learn to read the cryptocurrency market charts so that you can trade in a better fashion. Let us have a look at some of the basic ideas behind reading trading charts.
The line Chart – This is one of the most basic of the cryptocurrency trading charts. The chart shows the simple progression of a coin from its initial value and is indicated by a line. These are nothing but linear graphs about which everyone would have learnt in their high school. Sometimes there will be multiple lines in a chart denoting parameters such as market share and price over a time period. The linear graphs give you a decent idea about the fluctuations in the price of a coin over time. In a standard chart, one gets to see the price of Bitcoin in Green colour, Market cap in light blue colour and the 24 hour volume in grey colour.
Most of the trading charts provide a zoom feature. by using the feature, you can track coin the values over the course of an entire lifetime of a particular cryptocurrency. Also you can check the data pertaining to the past 1 year or 3 months using the zoom feature accurately. If you hover over the line charts, you can get the data for a particular time period. Some of them prefer the candlestick chart, which is an alternative way to know about this.
Most of the exchanges display the candle stick chart which provides better information.CEX.io, Binance and Coinbase exchanges display data by means of a candle stick chart. This chart is popular because it shows details such as the market cap, price and volume along with a zoom feature. It also provides more details about trading during the course of a given time period.
In case of a candlestick chart, a candle shaped object will provide you with details such as the highest and lowest price during the course of a particular time period, the opening price and it also displays the price at which a given trade closed for the day. The lines located at the top and the bottom of the candle shaped object provides information about the highest and lowest prices.