Understanding price actions starts with the understanding of entry-level Candlestick charts. A Candlestick chart forms the basis of technical analysis. Upon this knowledge, we can bring out important concepts like Support and Resistance, market trends, and price actions right from the chart.
As the name implies, this is a price action chart that involves numerous candles, which shows what the market is saying at a particular period. Unlike the other tools that indicate price action, Candlestick is way more comprehensive as they give the Open, Close, High, and Low price at a given instance.
OHLC, as they are called, is not placed statically on the candle as the location of each of these indicators is determined by whether the market is a Bearish(Sellers) market or a Bullish (Buyers) market.
For example, in a bullish candle, the “High” is placed at the top of the upper wick(or shadow), indicating the extent of the price before sellers stepped in. The Closing price is typically above the opening price, and the low of the candle is at the tip of the lower wick shows buyers strength when sellers attempted to push the price lower.
The opening price is typically above the close price for a Bearish Candlestick, indicating a declining price action. The High and Low indicate the attempt of the buyers to change the direction of the market trend.
The candle’s body is the point between the opening and closing price, and they indicate the strength of the dominating actors in the present market.
The colors of the candles are not cast in stone as they can be changed to trader preference. It’s, however, usual to see green used for a bullish candle, while red for a bearish candle. Traders also use other colors, including purple and blue, black and white, ash and brown.
The candles are given per period, meaning each candle on a 4-hour time frame indicates the market action for 4 hours; by lowering or increasing the timeframes, traders can see the market on a Micro or Macro level.
For example, tweaking your timeframe into a 1hr TF will zoom in your chart to split a 4hrs chart into 1hr candle each, giving you much more specific details of the price action for 4hrs.
Changing the time frame to a much bigger time frame, e.g., monthly, is now what we call zooming out, giving traders a broader perspective of the market.
Heikin-Ashi Candlestick is the modified version of the Japanese Candlestick, which has been expanded above. It uses the same concepts as the Japanese; the difference is that in Heikin-Aishi, the Candles are modified to give the average price. The main goal is to smooth out price action and filter out market noise, as traders can easily spot trends with this Candlestick type.
Depending on where these different candles are placed in the chart, they can give traders insight into what may happen in the market. Here are three more different types of candlestick patterns and their respective qualities.
The Doji is a single candle pattern and is neither bearish or bullish as Doji represents a state where the price closes precisely where it opened. For this reason, the Doji appears as a dash as it has no candle body.
Depending on where they are placed, hammer Candlestick may indicate trend reversals. This Candlestick pattern usually has a small body at the top or bottom with longer wicks at any of the two sides.
Hammer and Inverted Hammer: Same shapes appearing at the support region of a chart in a bearish trend indicating a bullish reversal incoming.
Hanging Man and Shooting Star: Same shapes as the Hammer and Inverted Hammer usually appear during a bull trend at the resistance areas in the chart, indicating an incoming reversal of the prevailing trend.
This typically involves a random and a bigger candle engulfing the smaller candle. As with the Hammer family, this depends on the area of support to indicate a trend reversal.
Bearish Engulfing candlestick appears in support with a big red candlestick engulfing the smaller green candle. Bullish Engulfing candle doing the same at the support zone, indicating a bullish trend incoming.
At every point in time, traders can look at the chart, place the chart in a Candlestick pattern, and grab a feel/perceptive of how the market is doing per time. With consistency, mastery, and application, a trader can correctly time the market, get accurate entries, and exit by understanding price action via Candlestick formations.
Candlesticks charts by themselves do not have a weakness. However, its weakness may come from the trader using it. For example, as with other technical indicators, Candlestick does not work in isolation. Even though the chart pattern tends to give an idea about the market per period, it works best with experienced minds that can extrapolate future trends as well as what is happening in the present.
A constant honing of the skills and mastering Candlestick will eliminate almost all possible weaknesses caused by human errors. This doesn’t mean traders will always make the right decision, but they will usually set themselves up for success if they master the method.
As we mentioned earlier, it requires a mastery of Candlestick charts in order to use them properly. The chart pattern is best used with the combination of other indicators and not by itself solely. Understanding the basics of support and resistance and applying risk management principles, including paper testing and backtesting the strategies, will hinge traders’ steps closer to better winning edges during trades.
The People’s Republic Bank of China (PBoC), the regulatory body that governs the financial sector in China, recently released a statement reiterating its stance on the 2017 regulation. This regulation prevents financial institutions from providing banking and settlement services for crypto-related transactions. The purpose identified by the central bank is the risk of virtual currencies disrupting normal economic and financial order, illegal cross-border transfer of assets, money laundering and other illegal and criminal activities.
The central bank now requires banks and payment institutions to implement a few regulatory requirements earnestly as part of their customer identification obligations to mitigate financial risks associated with virtual currencies. Upon identification, such categories of customers must not be allowed to open accounts or to participate in activities that involve virtual currencies through the mainstream financial institutions.
The present concern is a real one although the regulation has been around since 2017. The increased effort and scrutiny by the authorities in identifying crypto related transactions is telling of the Chinese government’s firm stand against such activities. The comprehensiveness of its monitoring mechanism to identify and track such activities is crippling the domestic crypto market.
Despite shutting down its domestic crypto exchanges and making crypto ownership increasingly difficult, China allows crypto ownership. Citing the volatility of virtual currencies and price manipulation, the Chinese government has been consistently adopting a hostile relationship with crypto assets. Despite such harsh treatment towards crypto assets, the regulation and policy surrounding blockchain related development has been a totally different treatment.
The Chinese government has been making its own roadmap for adoption of blockchain technology. Recognising the need to be competitive, the two main areas that have been identified for blockchain adoption are economy and finance. This has been revealed through a document officially released by its Ministry of Industry and Information Technology.
This preferential treatment seems to lead to one conclusion: the ease of transfer of value that virtual currencies can facilitate is destabilizing to the Chinese financial system. Therefore from the list of concerns outlined by the central bank the targeted approach seems to have its focus on cross border transfer of assets. Physical assets or fiat currencies are easily regulated by the existing framework of governance. Even if it slips regulatory safeguards, it is traceable, hence the granting of autonomy to crypto assets owners can be quite concerning.
China, just like other sovereign nations, is starting to see the benefits of digital currencies. However, these digital currencies must be controlled by the sovereign state’s governing body. In most cases, it is the central bank. The recent clampdown and tightening of the regulatory noose is a knee jerk reaction from the state’s own initiative in launching its digital yuan.
In a recent development, the state owned bank, Industrial and Commercial Bank of China has allowed for conversion between the digital currency and the physical currency. Real world trials are ongoing as China is preparing to launch a nationwide adoption of the digital currency. Crypto assets that can play the role of a digital currency are seen as a threat that will invariably dilute the use of the digital yuan. In order to be coherent and consistent in its regulatory enforcement, the ban and enforcement that is currently taking place cannot be seen to discriminate against the type of crypto asset.
The crypto market continues to wean itself from relying on China, resources and focus are slowly shifting to more pro crypto nations. Since the adoption of Bitcoin as legal tender in El Salvador, initiatives are now focussed on renewable geothermal energy for Bitcoin Mining.The current devaluation of crypto assets is painful but there is a silver lining in the clouds.
The Southeast Asia (SEA) event concluded on May 30, 2021, followed by the Binance announcement of the top 5 winners in various categories on June the 5th. The event was made possible through BSC network sponsoring Dorahacks, a global Hackathon organizer.
The event raised $27,394 in funding, which was distributed to the top 5 participating projects. The event comprised 31 teams from Singapore, Vietnam, Malaysia, Hong Kong, and Taiwan, all of whom submitted their project application for the Hackathon program.
Following the official end on May 30, a 5-day grace period for the anti-Sybil attack detection and vote analysis commenced. Finally, the team posted the final matching pool distribution result on June 5. The top 5 projects include XCarnival, Bami Defi, Spherium Finance, Project ARK, and Sota Platform. The following reviews of the winning projects of the Hackathon were obtained from the BSC recap blog.
Project ARK is the world’s first carbon-neutral NFT marketplace for rare digital collectibles. They directly fund animal and environmental conservation efforts worldwide. The projects mission is to connect passionate artists with purpose-driven buyers to support international NGOs like the World Wildlife Fund (WWF) and organizations related to the environment.
The protocol signed a partnership with the WWF. Its first-issued NFTs will directly fund community-driven conservations creating collective rewards systems that turn communities into conservationists. In addition, the protocol has signed over 150+ artists from around the world, including Emmy award filmmakers, famous recording artists, and even the IP owner of Pokemon. To learn more about Project ARK, visit Hackerlink.
The India-based protocol is a mobile-first cross-chain wallet that optimizes the returns on crypto-assets while minimizing the risks involved within the transactions. The team plans to bring DeFi to the masses by making it a more user-friendly and all-in-one concept.
Its dApp is currently compatible with BSC and Ethereum networks. They plan to move to Polygon Layer 2 to optimize speed, scalability and reduce transaction costs for users. The protocol is not bounded by one chain, and provision for listing projects to achieve cross chain is made possible by the integration of bridges which can help move tokens from one chain to another. To learn more about Spherium Finance, check Hackerlink.
Bami is a Vietnamese DeFi project seeking to leverage the financial viability of DeFi. It’s an economic city in which the currency will be BAMI (Bami native token). In Bami city, the citizens (users) use BAMI for trades, exchanges, investments, including Bami Dashboard, Bami Exchange, Bami Lend, Bami Portfolio, Bami Pay, NFT.
Bami sees DeFi as a service and have implemented a multichain financial application that aims to bring permissionless money solutions to the mass, built to integrate interchain solutions in savings, payment, trading, money market, etc. The team has expressed in the Hackathon its intention to focus on the Vietnamese market in the early phase but has plans to move to the international market. The protocol will be open-sourced, and its governance will be by the community. To learn more about Bami DeFi, kindly check out its Hackerlink.
Sota Platform is a Vietnamese-owned project that concentrates solely on the creation, sales, and distribution of NFTs. The platform will be on multichain with a start being on BSC and a gradual move to HECO chain and other chains in the future.
The team joins four others to become part of the SEA hackathon program 2021. To learn more about Sota Platform, check out its Hackerlink.
XCarnival took the first position in the Hackathon event. Experts involved in establishing the new Generation Synthetic Assets Aggregator for everyone in the DeFi and blockchain space are from Australia, the United States, and China. The CEO is a serial entrepreneur, an expert in DeFi, and a well-respected influencer in the blockchain space.
The protocol aims to bring down entry barriers for users by providing new products that are easy to use and maximizing the platform’s liquidity.
XCarnival presented four products in the Hackathon, including;
To learn more about XCarnival, visits the weblink.
Other participating teams in the Hackathon events include; Wooracle, Uptick, Deri Protocol, Hashtagger, Evolution Land, TrustFi network, etc. Visit the BSC recap page to learn more details about each team.
The BSC team extended their thanks to partners of the event, including Bifrost, DeBank, dForce, ETCLabs, Loopring, OKExChain, AngelONE, Solana, Konomi, Collinstar, Coinbene, YBB, SevenX for sponsoring and supporting this event.
It also extends its gratitude towards Blockchain&Dapps, Ethereum Singapore, Blockchain @NTU, Polkadot Singapore, Taiwan Blockchain Academia, NUS Fintech Society, Paulus from Clovers Ventures, NGC, Signum Capital, LongHash Ventures, Pendle, CMS, and IOSG for their help and participation.
DoraHacks Global Hackathon series is going on to host the US Crypto Summer Hackathon (online) via Hackerlink. It's the hope of the community that the sequence of events can help more open source developers to enrich their ideas and projects and build valuable blockchain products that will benefit more users.
Understanding these charts is key to becoming the most well-rounded, successful trader that you can be.
Understanding price actions starts with the understanding of entry-level Candlestick charts. A Candlestick chart forms the basis of technical analysis. Upon this knowledge, we can bring out important concepts like Support and Resistance, market trends, and price actions right from the chart.
As the name implies, this is a price action chart that involves numerous candles, which shows what the market is saying at a particular period. Unlike the other tools that indicate price action, Candlestick is way more comprehensive as they give the Open, Close, High, and Low price at a given instance.
OHLC, as they are called, is not placed statically on the candle as the location of each of these indicators is determined by whether the market is a Bearish(Sellers) market or a Bullish (Buyers) market.
For example, in a bullish candle, the “High” is placed at the top of the upper wick(or shadow), indicating the extent of the price before sellers stepped in. The Closing price is typically above the opening price, and the low of the candle is at the tip of the lower wick shows buyers strength when sellers attempted to push the price lower.
The opening price is typically above the close price for a Bearish Candlestick, indicating a declining price action. The High and Low indicate the attempt of the buyers to change the direction of the market trend.
The candle’s body is the point between the opening and closing price, and they indicate the strength of the dominating actors in the present market.
The colors of the candles are not cast in stone as they can be changed to trader preference. It’s, however, usual to see green used for a bullish candle, while red for a bearish candle. Traders also use other colors, including purple and blue, black and white, ash and brown.
The candles are given per period, meaning each candle on a 4-hour time frame indicates the market action for 4 hours; by lowering or increasing the timeframes, traders can see the market on a Micro or Macro level.
For example, tweaking your timeframe into a 1hr TF will zoom in your chart to split a 4hrs chart into 1hr candle each, giving you much more specific details of the price action for 4hrs.
Changing the time frame to a much bigger time frame, e.g., monthly, is now what we call zooming out, giving traders a broader perspective of the market.
Heikin-Ashi Candlestick is the modified version of the Japanese Candlestick, which has been expanded above. It uses the same concepts as the Japanese; the difference is that in Heikin-Aishi, the Candles are modified to give the average price. The main goal is to smooth out price action and filter out market noise, as traders can easily spot trends with this Candlestick type.
Depending on where these different candles are placed in the chart, they can give traders insight into what may happen in the market. Here are three more different types of candlestick patterns and their respective qualities.
The Doji is a single candle pattern and is neither bearish or bullish as Doji represents a state where the price closes precisely where it opened. For this reason, the Doji appears as a dash as it has no candle body.
Depending on where they are placed, hammer Candlestick may indicate trend reversals. This Candlestick pattern usually has a small body at the top or bottom with longer wicks at any of the two sides.
Hammer and Inverted Hammer: Same shapes appearing at the support region of a chart in a bearish trend indicating a bullish reversal incoming.
Hanging Man and Shooting Star: Same shapes as the Hammer and Inverted Hammer usually appear during a bull trend at the resistance areas in the chart, indicating an incoming reversal of the prevailing trend.
This typically involves a random and a bigger candle engulfing the smaller candle. As with the Hammer family, this depends on the area of support to indicate a trend reversal.
Bearish Engulfing candlestick appears in support with a big red candlestick engulfing the smaller green candle. Bullish Engulfing candle doing the same at the support zone, indicating a bullish trend incoming.
At every point in time, traders can look at the chart, place the chart in a Candlestick pattern, and grab a feel/perceptive of how the market is doing per time. With consistency, mastery, and application, a trader can correctly time the market, get accurate entries, and exit by understanding price action via Candlestick formations.
Candlesticks charts by themselves do not have a weakness. However, its weakness may come from the trader using it. For example, as with other technical indicators, Candlestick does not work in isolation. Even though the chart pattern tends to give an idea about the market per period, it works best with experienced minds that can extrapolate future trends as well as what is happening in the present.
A constant honing of the skills and mastering Candlestick will eliminate almost all possible weaknesses caused by human errors. This doesn’t mean traders will always make the right decision, but they will usually set themselves up for success if they master the method.
As we mentioned earlier, it requires a mastery of Candlestick charts in order to use them properly. The chart pattern is best used with the combination of other indicators and not by itself solely. Understanding the basics of support and resistance and applying risk management principles, including paper testing and backtesting the strategies, will hinge traders’ steps closer to better winning edges during trades.
