The most common way to view prices is through Candlestick Charts. Each "candle" tells a story of what happened over a specific time (like 1 hour or 1 day).
The Body: The thick part showing the difference between the opening and closing price.
The Wick (or Shadow): The thin lines sticking out of the top and bottom, showing how high and low the price went during that time.
Green/White Candle: The price went up (Close is higher than Open). 📈
Red/Black Candle: The price went down (Close is lower than Open). 📉
Support and Resistance
The very first thing a pro trader does is identify "floors" and "ceilings" on the chart.
Support (The Floor): A price level where a downtrend tends to pause due to a concentration of buying demand. 🟢
Resistance (The Ceiling): A price level where an uptrend tends to pause as traders start selling. 🔴
Support 🟢 acts like a floor because there are enough buyers at that price to stop the "falling knife" and push the price back up.
When you are looking at a chart, you’ll often see the price hit that floor multiple times. The more times it bounces without breaking through, the "stronger" that support is considered to be.
Resistance 🔴 is a price level where a lot of traders have set "Sell" orders. When the price climbs up and hits this ceiling, the selling pressure is usually too high for the price to keep going, so it drops back down.
Putting it Together: The "Breakout"
The most exciting part for a trader is the Breakout. This happens when the price finally gathers enough "momentum" (buying power) to smash through the Resistance ceiling. 🔨
Pro Tip: Once the price breaks through Resistance, that old ceiling often turns into a new Support floor.
