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Welcome to Part 1 of The Unity Trading Group Beginner Crypto Trader Series! 

We don’t know about you, when we first started trading, there was SO much info take in but we had NO idea where to start. All of the information available online is there, but where is the best place to start as a beginner so we can avoid to dreaded “trader overwhelm”?

Since we get asked so often about beginner trader material, we thought why not just go ahead and create the complete guide that we wish we had when first starting out? So that’s exactly what we did…

In this first episode of the series we are starting from SCRATCH and if this all seems a little too basic for you, then stay tuned because you’re going LOVE what we have in the coming weeks as we get into more advanced beginner strategies and the foundations of a kick ass trading plan.

Let’s dive in.. but before you do, want loads of free beginner material, podcasts and all of our favourite free trading tools we personally use and recommend? Join us on discord

Part 1 – Trend Analysis and Candlesticks

What is Trend Analysis

Trend analysis is a technique used by traders in order to predict the future price of a coin, FX pair or stocks movements based on previously seen trend data. It’s based on the idea that what has happened in the past gives us an idea of what will happen in the future.

As a trader, we’re constantly looking for patterns or “trends” to help us understand where a coin will repeat those same types of patterns or trends that have occurred at the same level once (or many) times before. 

There are Three (3) Types of Trends:

  • Short Terms
  • Mid Term (intermediate)
  • Long Terms

What are Candlesticks?

Candlestick charts are a type of financial chart for tracking the movement of coin. They began in the Japanese rice trade and now also have their place in today’s charts… they are THAT old.

  • OPENING PRICE
  • CLOSING PRICE
  • THE HIGH PRICE
  • THE LOW PRICE

Candlesticks are called “candlesticks” they looks similar to… you guessed it. Candles.. Most traders find them more visually appealing than the standard bar charts and the price actions easier to interpret. Over time, the candlesticks group into patterns that we can use to make buying and selling decisions and each candlestick represents price data for that given time period through four (4) pieces of information..

Candlesticks 101:

Bullish Reversals and Candles

Just like red means stop, green means go and green candles represent “bullish” price action. Which means that the price of a given coin is going up, until such time as it hits a level of resistance and starts to move down (become bearish)

Bullish reversal patterns should form within a downtrend. Otherwise, it’s not a bullish pattern, but a continuation pattern. Most bullish reversal patterns require bullish confirmation. In other words,  they must be followed by an upside price move which can come as a long candlestick or clear move up, and be accompanied by high trading volume.

Let’s take a look at some BULLISH reversals…

THE HAMMER

The Hammer candle means that a coin is almost at the end of it’s downtrend and things may be about to change. The body of the candle is short with a longer lower shadow which is a sign of sellers driving prices lower, only to be followed by strong buying pressure to end on a higher close.

Before we jump in on the bullish reversal action, however, we must confirm the upward trend by watching it closely because the reversal must also be confirmed with an increase is buying volume.

THE BULLISH ENGULFING

The Bullish Engulfing pattern is a two-candle reversal pattern. The second candle completely ‘engulfs’ the real body of the first one. A Bullish Engulfing pattern appears when price opens lower than the previous low, but buyers are pushing the price up to a higher level than the previous high, creating some juicy profits for the trader!

A trader could enter a long position when the price moves higher than the high of the second engulfing candle when the reversal is confirmed.

THE MORNING STAR

Consists of three candles: one short-bodied candle (doji or a spinning top) between a former bearish candle and a following bullish one. It shows that the sellers are drying up and the buyers have taken over.

The bullish candle overlaps with the body of the previous bearish one and shows a fresh buying pressure and a start of a bullish reversal, especially if confirmed by the higher buying volume.

THREE WHITE SOLDIERS

This pattern is usually found after a downtrend or in price consolidation (this means when the price is travelling sideways, without any clear indication that we are going up or down) It consists of three long green candles that close progressively higher on each close.

Each candle opens higher than the previous open and closes near the high of the day, showing a steady advance of buying pressure.

Bearish Reversals and Candles

For traders shorting the market, bearish candles can be as equally profitable as bullish ones, for those of us who aren’t playing with leverage, red candles are the LAST thing we want to see…

Bearish reversal patterns should form within an uptrend. Otherwise, it’s not a bearish pattern, but a continuation pattern. 

Most bearish reversal patterns require bearish confirmation. In other words, they must be followed by a downside price move which can come as a long candlestick or a gap down, and be accompanied by low trading volume.

BEARISH ENGULFING

The bearish engulfing is the opposite of the “bullish engulfing” and is a very important candlestick formation for predicting price trends. It consists of two bodies, with the left-hand candle being the previous bullish candle, that is “engulfed” by the bearish candle, which has now closed.

The bigger it is, the more bearish the reversal. The red body must totally engulf the body of the first green candlestick. Ideally, the red body should engulf the shadows as well.

SHOOTING STAR

The shooting star is made up of one candlestick with a small body, long upper shadow, and small or nonexistent lower shadow. The size of the upper shadow should be at least twice the length of the body and the high/low range should be relatively large.

The long wick tells us that the sellers are taking over and driving the price down. Look for this candle at the top of an uptrend to signify that the buyers are losing control of the bullish trend.

EVENING STAR

This is a meaningful top pattern and is a three-candlestick pattern signaling a major top reversal. In short… we’re going down captain. It is made up of a green candlestick followed by a short candlestick, which forms at the very top of the pattern, which precedes the larger bearish candle.

This larger bearish candles often closes well into the first candles green body.

Nice Work Trader! 

You’re now officially into the trading game and know the basics of bullish and bearish candles as well as some of the more popular candle formations you’re likely to see on your path to trading success.

Watch the Video below for a full breakdown of each of the patterns, as well as a LIVE example on the charts and download this article as a PDF! 

Download Direct From Our Discord Channel

Join Our Dedicated Beginner Channel in Discord

Ask questions and get answers from team Unity and our trading OG’s inside our dedicated beginner trader discord channel, with LOADS of bonus beginner trading content & more! 

Join The Community of SERIOUS Traders Today

Ask questions and get answers from team Unity and our trading OG’s inside our dedicated beginner trader discord channel, with LOADS of bonus beginner trading content & more! 

TODAY’S TOPIC

PT 1 -Trend Analysis & Candlesticks

On this first session of the UTG Complete Beginner Crypto Trader Series, we dive head first into the fundamentals of any beginner trading strategy… Trend analysis and candle structure! 

YOU’LL LEARN

  • What is Trend Analysis and how we can use it to our advantage. 
  • What is a candle and candle structure?
  • How “looking left” can earn you profits
  • Common crypto candle formations
  • Real life example on a chart

RESOURCES

Welcome to Part 1 of The Unity Trading Group Beginner Crypto Trader Series! 

TODAY’S TOPIC

PT 1 -Trend Analysis & Candlesticks

On the first session of the UTG Complete Beginner Crypto Trader Series, we begin with the essential elements of any beginner trading strategy… Understanding Trend Analysis and Candles.

YOU’LL LEARN

  • What is trend analysis and how we can use it to our advantage?
  • What is a candle and candle structure?
  • How “looking left” can make you profits
  • Common crypto candle formations
  • Real life example on a chart

RESOURCES

Not sure about you, but when we first started trading, there was SO much info take in but we had NO idea where to start, or how to make sense of what we were seeing. All of the information available online is there, but where is the best place to start as a beginner so we can avoid to dreaded “trader overwhelm”?

Since we get asked so often about beginner trader material, we thought why not just go ahead and create the complete guide that we wish we had when we starting out? So that’s exactly what we did…

In this first episode of the series we are starting from SCRATCH and if this all seems a little too basic for you, then stay tuned because you’re going LOVE what we have in the coming weeks as we get into more advanced beginner strategies and the foundations of a kick ass trading plan.

Let’s dive in.. but before you do, want loads of free beginner material, podcasts and all of our favourite free trading tools we personally use and recommend? Join us on discord

Part 1 – What is Trend Analysis and Candlestick Basics

What is Trend Analysis?

Trend analysis is a technique used by traders in order to predict the future price of a coin, FX pair or stocks movements based on previously seen trend data. It’s based on the idea that what has happened in the past gives us an idea of what will happen in the future.

As a trader, we’re constantly looking for patterns or “trends” to help us understand where a coin will repeat those same types of patterns or trends that have occurred at the same level once (or many) times before. 

There are Three (3) Types of Trends:

  • Short Terms
  • Mid Term (intermediate)
  • Long Terms

What are Candlesticks?

Candlestick charts are a type of financial chart for tracking the movement of coin. They began in the Japanese rice trade and now also have their place in today’s charts… they are THAT old.

  • OPENING PRICE
  • CLOSING PRICE
  • THE HIGH PRICE
  • THE LOW PRICE

Candlesticks are called “candlesticks” they looks similar to… you guessed it. Candles.. Most traders find them more visually appealing than the standard bar charts and the price actions easier to interpret. Over time, the candlesticks group into patterns that we can use to make buying and selling decisions and each candlestick represents price data for that given time period through four (4) pieces of information..

Candlesticks 101:

Bullish Reversals and Candles

Just like red means stop, green means go and green candles represent “bullish” price action. Which means that the price of a given coin is going up, until such time as it hits a level of resistance and starts to move down (become bearish)

Bullish reversal patterns should form within a downtrend. Otherwise, it’s not a bullish pattern, but a continuation pattern. Most bullish reversal patterns require bullish confirmation. In other words,  they must be followed by an upside price move which can come as a long candlestick or clear move up, and be accompanied by high trading volume.

Let’s take a look at some BULLISH reversals…

THE HAMMER

The Hammer candle means that a coin is almost at the end of it’s downtrend and things may be about to change. The body of the candle is short with a longer lower shadow which is a sign of sellers driving prices lower, only to be followed by strong buying pressure to end on a higher close.

Before we jump in on the bullish reversal action, however, we must confirm the upward trend by watching it closely because the reversal must also be confirmed with an increase is buying volume.

THE BULLISH ENGULFING

The Bullish Engulfing pattern is a two-candle reversal pattern. The second candle completely ‘engulfs’ the real body of the first one. A Bullish Engulfing pattern appears when price opens lower than the previous low, but buyers are pushing the price up to a higher level than the previous high, creating some juicy profits for the trader!

A trader could enter a long position when the price moves higher than the high of the second engulfing candle when the reversal is confirmed.

THE MORNING STAR

Consists of three candles: one short-bodied candle (doji or a spinning top) between a former bearish candle and a following bullish one. It shows that the sellers are drying up and the buyers have taken over.

The bullish candle overlaps with the body of the previous bearish one and shows a fresh buying pressure and a start of a bullish reversal, especially if confirmed by the higher buying volume.

THREE WHITE SOLDIERS

This pattern is usually found after a downtrend or in price consolidation (this means when the price is travelling sideways, without any clear indication that we are going up or down) It consists of three long green candles that close progressively higher on each close.

Each candle opens higher than the previous open and closes near the high of the day, showing a steady advance of buying pressure.

Bearish Reversals and Candles

For traders shorting the market, bearish candles can be as equally profitable as bullish ones, for those of us who aren’t playing with leverage, red candles are the LAST thing we want to see…

Bearish reversal patterns should form within an uptrend. Otherwise, it’s not a bearish pattern, but a continuation pattern. 

Most bearish reversal patterns require bearish confirmation. In other words, they must be followed by a downside price move which can come as a long candlestick or a gap down, and be accompanied by low trading volume.

BEARISH ENGULFING

The bearish engulfing is the opposite of the “bullish engulfing” and is a very important candlestick formation for predicting price trends. It consists of two bodies, with the left-hand candle being the previous bullish candle, that is “engulfed” by the bearish candle, which has now closed.

The bigger it is, the more bearish the reversal. The red body must totally engulf the body of the first green candlestick. Ideally, the red body should engulf the shadows as well.

SHOOTING STAR

The shooting star is made up of one candlestick with a small body, long upper shadow, and small or nonexistent lower shadow. The size of the upper shadow should be at least twice the length of the body and the high/low range should be relatively large.

The long wick tells us that the sellers are taking over and driving the price down. Look for this candle at the top of an uptrend to signify that the buyers are losing control of the bullish trend.

EVENING STAR

This is a meaningful top pattern and is a three-candlestick pattern signaling a major top reversal. In short… we’re going down captain. It is made up of a green candlestick followed by a short candlestick, which forms at the very top of the pattern, which precedes the larger bearish candle.

This larger bearish candles often closes well into the first candles green body.

Nice Work Trader!

You’re now officially into the trading game and know the basics of bullish and bearish candles as well as some of the more popular candle formations you’re likely to see on your path to trading success.

Available From Our Disord Only

Join Our Dedicated Beginner Channel in Discord

Ask questions and get answers from team Unity and our trading OG’s inside our dedicated beginner trader discord channel, with LOADS of bonus beginner trading content & more!

Join Our Dedicated Beginner Trader Discord

Ask questions and get answers from team Unity and trading OG’s inside our dedicated beginner trader discord channel, with LOADS of bonus trading content & videos.

* 2018 Unity Trading Group PTY LTD. The information on this website has been created by Unity Trading Group (ABN: 630163343) for general information and educational purposes only and is not to be constructed as personal or financial advice. All forms of trading carry a high level of risk, and may not be suitable for all investors. Before deciding to trade any market reported on by Unity Trading Group you should carefully consider your objectives, financial situation, needs, and level of experience. By trading, you could sustain a loss in excess of your deposited funds. Before trading ASX/FX/Cryptocurrency markets you should be aware of all the risks associated with trading. Unity Trading Group recommends you seek advice from a separate financial advisor before making any decisions based on the general information given on this website or affiliated platforms.

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