Learn How to Trade | Crypto, Stock Markets & Foreign Exchange
In this article were going to walk you through How to Trade. We will start right from the beginning, and then lean into some more advanced skills for real world experience in trading in the Crypto Market, Stock Markets & Foreign Exchange.
How to Trade in the Crypto Market, Stock Markets & Foreign Exchange
Everything you’re going to learn here will allow you to trade any asset you would like to. There will, however, be some differences depending on the asset you are trading. Luckily the main idea is going to stay the same.
Once you get the hang of trading, you can also decide how committed you would like to be – a higher level of commitment allowing you to become better and better, and eventually paving the way for you to earn a decent income out of trading.
When you first start trading, you might be in front of something that looks like this:
If I didn’t know anything about trading this would be very scary right now. Looking at a chart for the first time can be very confusing or intimidating. What you want to do is to start on a clean chart – what you are looking at above is basically what every trader will be interested in starting with.
Trade by Understanding Price Action
All those little green and red lines are called “candlesticks” and “price action”. You can see how the price moves over time by looking at the candlesticks.
On any chart you can see in the top left corner, there will be a specified amount of time. In the chart above it’s “4h” or four hours. This means that one Candlestick is going to represent four hours.
You can choose between the Candlestick’s time representation by changing this amount to one day, one week, one month, and all the way down to seconds!
How Candlesticks Work
Now let’s take a closer look at how these candlesticks actually work by diving into a bit more detail.
Here you are looking at two candlesticks.
On the left of your screen there is a green Candlestick representing the the price going up, or increasing. The red candlestick represents the price going down, or decreasing.
The first information you’ll be provided with is given by the body of the Candlestick. The body is represented by the fat part of the Candlestick.
On the green Candlestick, the closing price of that Candlestick is going to be at the top part of the body, and the opening price will be the bottom part of that body.
The red Candlestick’s opening price is going to be the top of the body, and the closing price the bottom.
In summary, the candlesticks are going to give us the price action, which is basically depicting if the price went up or down over a period of time, and by how much. This will always be over a period of time, such as a day, a week, an hour, five minutes or even seconds.
Candlestick Shadows / Tails / Wicks
Some other very important information you’ll see on a candlestick is depicted through the thin lines that you can see on the top and bottom of the candlesticks. Some candlesticks will have longer or shorter lines or no line at all. These lines are called the “Shadows” or the “Tails”. I prefer using the term “Wicks”.
The candlestick “wicks” give you the the the full extension of the price over that period. The top of a particular wick is going to be the highest price over the period that the candlestick is going to cover. The bottom of the candlestick wick is going to be the lowest price. This applies to both the red and green candlesticks.
That’s all the information that we get from the Candlesticks. We have an opening price, a closing price, and then we have a variation of the maximum and minimum price, along with a particular time interval.
Let’s have a look at the Bitcoin chart that we looked earlier:
I’m just going to draw your attention to one Candlestick, the one in the middle – which is a green Candlestick. This is showing us that the price went up over that period.
It’s a four hour Candlestick, so over that four hour period, the price went up.
When you highlight the Candlestick, you will have a bit more information:
Additional Information Provided by The Candlesticks
The bottom part it’s going to basically give you what date and time that Candlestick covers, so here we’ve got the 27th of July 2022 and that Candlestick started at four o’clock in the afternoon. The timezone is going to be UTC, however you can work within your own time zone. If you study that four clock, you’ll see that with the relevant timestamp, it closed at eight o’clock.
At the top you will have the opening price, the highest price, the lowest price and the closing price.
Here you will see the variation of those prices over the four hour period.
In the chart above, the Bitcoin price went up over 1200 dollars, in percentage the price went up 5.7 percent.
This indicates that when you look at one Candlestick, you will be able to know exactly what happened during a specific time period.
Candlestick Trends & When to Trade
Now you can see that we’ve got all this valuable information provided by one Candlestick. By looking at a collection of candlesticks, you can determine trends. You can see if the price is mainly going up or is mainly going down.
Looking a the trends is the first thing that any successful Trader will look at. You want to try to determine what the upcoming trend is going to be!
Different Trading Styles
When you start trading, you are going to be looking at trading something based on your personal preference, which could entail trading throughout the day, or trading for five minutes. This is going to indicate different types of trading by looking at different time frames on your candlesticks.
Swing trading means that you’re gonna have trades open for a few days, and maybe a few weeks. Swing trading entails a slower pace of trading, so you’re not going to be glued to your chart, entering and exiting trades.
Since swing trading has a longer time frame, it’s a bit more relaxed. This style of trading works best for people who don’t want to be glued to the screen all the time. Swing trading allows for a little bit more relaxation, giving the price the ability to move around more and allowing us to stay relaxed and keep the trades open without constantly having to check our screen!
Day trading is a bit more intense. With day trading, you’re going to be looking at your charts hourly all the way down to the 15 minute – five minute time interval. For day trading, you want to try not to go lower than 15 minute intervals, so that your trades are going to last a few hours, to a day.
Scalping is the type of trading that will have you glued to your chart. You’re going to enter a trade and exit in the matter of minutes to seconds, rarely more than 10 minutes!
I’m not confident that people make more money trading in shorter time intervals, because I think that we’re exposed to losing a lot more because of the noise in the charts. If a big move were to come in unexpectedly, however, that could change things very quickly for us!
Learn More About Crypto
If you would like to know more and keep up to date on crypto, we have a Discord server where we post our trades on a regular basis and keep our community updated as the trades progress.
Our Discord Crypto Community is here to provide you with more in-depth information about trading, macro economic updates in the crypto market, and very important psychology and mindset tricks for mastering the inner game that’s needed for trading! Click HERE if you’re interested!