Beginner’s Guide to Crypto Trading & Candlestick
Patterns
■ Step 1: Understanding Cryptocurrency
Cryptocurrency is digital money that uses blockchain technology. The most famous is Bitcoin
(BTC), but there are thousands of coins. They can be divided into different categories: - Bitcoin
(BTC): The first cryptocurrency, often called 'digital gold'. - Altcoins: All other cryptocurrencies
(ETH, SOL, ADA, XRP). - Stablecoins: Coins pegged to stable assets like USD (USDT, USDC). -
Utility Tokens: Tokens used for specific purposes (BNB, UNI). Why trade crypto? Because it is
highly volatile, meaning prices move fast, creating opportunities to profit.
■ Step 2: Types of Crypto Trading
1 Spot Trading: Buying and selling crypto directly (recommended for beginners).
2 Futures Trading: Speculating on price with leverage (high risk, avoid at start).
3 Swing Trading: Holding trades for days/weeks to catch bigger moves.
4 Scalping/Day Trading: Very short-term trades (requires skill & speed).
■ Step 3: Key Market Concepts
- Market Cap = Price × Circulating Supply (shows coin size). - Liquidity = How easily you can
buy/sell without big price changes. - Volatility = Speed and size of price movement (higher = riskier
but more profit potential).
■ Step 4: Understanding Candlesticks
Candlestick charts show market psychology and price movement over time. Each candle has: -
Open: Price at start of period. - Close: Price at end of period. - High: Highest price in that period. -
Low: Lowest price in that period. Green/White Candle = Price went up (Bullish). Red/Black Candle
= Price went down (Bearish).
■ Step 5: Common Candlestick Patterns
1 Doji: Open ≈ Close → Market indecision.
2 Hammer: Small body, long bottom wick → Bullish reversal signal.
3 Shooting Star: Small body, long top wick → Bearish reversal signal.
4 Engulfing: Large candle covering previous one → Strong reversal sign.
■ Step 6: Step-by-Step Function to Start Trading
1 1. Learn basics of crypto and candlesticks (this guide).
2 2. Create account on a trusted exchange (Binance, KuCoin, Bybit).
3 3. Start with Spot Trading only (avoid leverage).
4 4. Use demo/paper trading before risking real money.
5 5. Start with small capital ($20-$50) to practice.
6 6. Focus on risk management: Never risk more than 2% of account on one trade.
7 7. Keep learning technical analysis & patterns.
8 8. Gradually increase trading size after consistent profits.
■ Tip: Crypto trading is risky. Start small, focus on learning, and always protect your capital.
