TradingView and Identifying Charts
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This blog post includes:
- TradingView
- Charting
TradingView
In previous articles, I have shown examples of charts from the site TradingView (https://www.tradingview.com/). To understand the next couple of articles, it is best to get familiar with it or any similar trade charting tool. It has many features that make strategy creation easy, which is the main point of charting. Creating a strategy allows you to be consistent in trading. There are many ways to create and build your own strategy, and in future articles I will go over many strategies that I have come across and use on a daily basis.
TradingView is free with ads and limitations, but there are more functional paid versions (https://www.tradingview.com/gopro/). You can do a lot without paying, but if you are diving deeper into crypto and trading, the more advanced stuff will be worth the money, as time will tell.
TradingView provides the ability to see previous data, chart with many tools, and even create scripts and tools that can be overlaid on a chart. There are also backtesting and alerting capabilities so that you can test strategies or be informed of an upcoming move in advance.
One thing to note is the ability to trade in other markets inside of TradingView; however, you can’t place orders on any cryptocurrency exchanges from inside TradingView. TradingView is your map and guide; it’s still up to you to manage orders on an exchange.
Basic Interface
The basic chart is a white, grid-like screen, with some candles in the middle and numbers on the side. (I will explain candles in a later article as there are many types.) I will briefly go through each section, but in-depth information will be described in later articles when we get into trading specifics. What follows is a basic outline of each area.
The Chart Area
The main viewing area is called the chart area. Here you will see candles, prices, and a timescale. You can drag the chart to view the history, and zoom out to view the price action.
In the top left corner is the chart information, which includes the trading pair (ETH/USD in this case), the time frame for each candle (240, meaning 240 minutes in each candle), and the exchange (COINBASE).
To the right of this information is the OHLC, which stands for the Open, High, Low, and Close of the candle your mouse is hovering over. In this example, the candle opened at 475. The price went as high as 479 and as low as 470, and after a set time the candle closed, moving on to the next candle at 478. The number at the end is the gain, +3.14, which is the difference between the open and close. This is also defined as a percentage (+0.66%) as well.
On the right side you will see the price scale, with the current price a timer in red. In this example, the candle will close in 33 minutes and 26 seconds, and another will open beside it.
The last few indicators on this screen are the log scale (log), the automatic scale (auto), and the settings icon (the gearbox).
The log scale changes the scale of the chart to logarithmic. This makes things easier to see when large price movements occur; things that look parabolic in normal view may look straight in log view. Below is an example. Note that this is the same chart and time frame, with normal view on the left and log view on the right.
https://www.tradingview.com/x/AnMMoAqK/
The auto scale essentially locks the chart when you are moving around to show most of the action in that viewable area. You will see what I mean when you drag the chart around, turn off auto, and then drag it around again.
The settings are very detailed, so you can change your chart to suit your viewing style.
On the Style tab, you can change your candles’ colours, as well as the lines (called wicks) that extend from them. The theme can be configured at the bottom. I prefer a dark theme, as you can tell by my charts; I feel it is less harsh on the eyes.
The Scales tab allows you to change the labels and values. There is also the ability to invert the scale, if you want to see a different perspective on things, or move the scale from the right side to the left. You can also adjust decimal places, which depend on the trading pair you are using. In the examples I’ve shown so far there are only two decimal places after the whole number, since we are using ETHUSD. However, Bitcoin can be eight decimal places long. The scale will automatically default to match the trading pair, but you can still manually change the decimal places.
On the next tab, Background, you can change the background to whatever colour you like. I always turn off the grid lines. They are useless, obscure information, and can mislead you.
There are other settings tabs, but I rarely go into them as they aren’t useful to me at this time.
The Main Menus
The main menu items for TradingView are at the top left of the screen. Notifications are shown in the top left (the purple icon).
The next menu sets the exchange and coin pair. If you click in there and type a coin pair such as ETHUSD, you can select any exchange that offers that pair. I recommend choosing the one you have funds are on, or picking a larger exchange like Binance, Poloniex, Bitfinex, or Coinbase.
The next menu lets you set the time frame for the candles. You can select a preset one or add your own at the bottom. The set ones are used by the mass majority of people. If you use an offset time frame, like 55 min instead of 1 hour, you can potentially see a few things ahead or behind everybody else. I only recommend adding offset time frames with more advanced strategies so that you can look for anomalies.
Candles are next. For now, the easiest to use (until you start using more advanced methods) is Candles.
The Compare menu allows you to compare the selected trading pair to other trading pairs, which is not covered in this article.
Indicators assist with trading. There are many of them, some made by other users, and some built in. We will be diving into indicators in a later article; for now, just know that this is where you find them.
Templates are used to quickly set up and save a charting template, which makes it easy to deploy a view onto a chart when switching between trading pairs.
Alerts are useful for alerting you to changes. You can put an alert on anything in the chart, from an indicator to a trading pair crossing a particular price. There are multiple ways to alert you. Personally, I use email, or email to SMS, which sends a text message to me when an alert goes off.
Replay is useful for backtesting strategies without seeing future candles. You can pick a time and spot in the past and then see how it played out.
On the top right are some simple tools. The square box is the layout, allowing you to have multiple charts and timeframes all on the same screen. To the right of that (where is says “Testing” in the screenshot) you can save the layout and all the charts and label them. The gearbox icon is another way to get into settings. The icon with four arrows toggles full screen mode. The camera icon takes screenshots, which is a useful way to demonstrate your ideas and observations directly — I use this almost daily. Publish is used for the social side of TradingView; it’s another way to share your ideas with others.
Chart Tools
The tools are on the left side of the screen. There are too many to go through in this article, and just playing with them is the best way to learn. We will use them in later articles.
Trading Notes
Trading notes are at the bottom of the screen, along with a script editor and a strategy tester. These are more advanced features that can be used when becoming more fluent in TradingView. I will go over the strategy tester in a later article.
Personal Tools
You can keep track of things with the tools on the right side of the screen. The main one to use is Watchlist, where you can keep track of trading pairs you are interested in and switch to them in one click. If you have set up alerts you can check them here. Most of the other tools don’t apply to crypto, other than the social media side of things (which certainly isn’t mandatory).
Charting
The first thing to learn when looking at a chart is to recognize what you are looking at. Setting aside advanced concepts like indicators and strategies, you basically want to know, “What am I looking at?” This applies to my charts as well as your own. The following items can be found on any chart as well as any charting software.
- Price
- Time Frame
- Trading Pair
- Exchange
- Previous Action
- Indicators (Optional)
- Ideas (Optional)
Here are some of my charts with these important areas labelled.
Added a few more labels to this one:
These may not make sense to you yet, and that is okay. There is a lot going on in charts, and until you familiarize yourself, things may look confusing. All that I want to show is how to identify what you are looking at: what the trading pair is, what each candle time frame is, the price on different dates, and where we are now. That’s all you needed to know for now.
What charting can do:
- Help you develop and test strategies (using data on previous gains and losses)
- Allow you to view price action
- Let you gauge risk and reward
- Give guidance on current situations based on past performance
- Be trusted, as it is based on real, raw data that is irreversible (data isn’t manipulated after it is printed)
What charting cannot do:
- Hide the truth with fake, useless, fancy graph lines or memes
- Guarantee the future
- Provide all the answers
The chart is my weather report. Nobody can tell the future, neither meteorologists nor traders. You cannot be mad at the meteorologist if the weather forecast is wrong. Traders prefer high probability trades and high risk-to-reward scenarios, but success is never guaranteed. The chart can’t be blamed for misinterpretations, and blaming the chart is a sign of disassociation.
Charts are not all magic triangles, the chart patterns that are the worst win rate of most indicators. While they are often the first thing people learn and are good basic stepping stones, it takes dedication and the willingness to learn to be able to use charts effectively.
Takeaways
In this article we looked at TradingView, a platform to begin trading on. We also reviewed charting in general, focusing on how to identify what you are looking at, and what charting can and cannot do.
- TradingView is a powerful tool, allowing you to track your investments and trades.
- Charts in general have the same properties associated to them. Know what you are looking at before making assumptions about what other traders are thinking.
- Using charts will be your main bread and butter in long term trading and investing. Examining charts and creating your own to share with others will help you in the long run.
