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Chart Analysis, Properly From the Start

33 lessons from reading a single candle to indicators, patterns and backtests, with charts drawn for each concept and statistics measured on real Binance data.

⏱ About 3min read ·Information updated 2026-09-23

📋 Key facts

Structure
33 lessons in 8 parts, meant to be read in order
Figures
Every lesson has charts drawn to show its concept
Measured
Pattern and signal statistics come from Binance history
Note
Educational material, not investment advice

What this course covers

The course starts with reading one candle and moves in order through trend and price structure, indicators, candlestick and chart patterns, combining signals, and finally testing results and measuring risk. Formulas and default settings follow the definitions widely used on TradingView and match the settings of this site's crypto tools, so every lesson links to a live chart where you can see the same indicator on real data.

How to read the figures and numbers

Figures whose captions begin with "Illustration:" use made-up prices to show a concept. The indicator lines on them, such as moving averages, RSI or the Ichimoku cloud, are not hand-drawn: they are calculated from the candles in the figure. Pattern and signal results were measured on daily candles of ten coins on Binance from 2017 to September 2026, always next to a baseline of buying on any candle. Without that baseline, the market's rise over the period would look like the power of a signal.

Part 1. Chart basics

What one candle holds, how bar length and scale change the picture, and why volume matters.

  • How to Read a Candlestick Chart: Four Prices, Body and Wicks
  • How to Choose a Timeframe: Why the Same Chart Looks Different
  • Log vs Linear Charts: Why Long-Term Charts Use a Log Scale
  • How to Read Trading Volume: Why It Should Be Paired With Price

Part 2. Trend and price structure

Defining trend by highs and lows, then support and resistance, trendlines, breakouts and ranges.

  • How to Identify a Trend: Market Structure from Highs and Lows
  • How to Draw Support and Resistance: Zones, Not Lines
  • How to Draw Trendlines and Channels: From Connecting Lows to Reading a Break
  • Breakouts vs. Fakeouts: How to Tell Them Apart, and the Limits of Doing So
  • How to Spot a Ranging Market and Why Trend Indicators Whipsaw

Part 3a. Indicators: trend and momentum

Moving averages, RSI, MACD, Bollinger Bands and the stochastic: formulas, defaults and measured results.

  • How to Read Moving Averages: SMA vs EMA and the Golden Cross Track Record
  • How to Read RSI: What 70 and 30 Mean and What Real Data Says About Overbought
  • How to Read MACD: MACD Line, Signal Line, Histogram and Zero Line
  • How to Read Bollinger Bands: Bandwidth, the Squeeze and %B
  • How to Read the Stochastic Oscillator: %K, %D and the 80/20 Lines

Part 3b. Indicators: volatility and price levels

ATR, Ichimoku, Supertrend, Fibonacci retracements, volume profile and VWAP.

  • How to Use ATR to Measure Volatility: Stop Distance and Position Size
  • How to Read the Ichimoku Cloud: Conversion Line, Base Line, Cloud and Lagging Span
  • How to Read the Supertrend Indicator: The ATR Trailing Line and Its Weaknesses
  • How to Draw Fibonacci Retracements: What 0.382, 0.5 and 0.618 Really Are
  • How to Read Volume Profile and VWAP: POC, Value Area and Anchored VWAP

Part 4. Candlestick patterns

One- to three-candle patterns, defined precisely and checked against years of Binance data.

  • Hammer, Shooting Star, Doji and Long Candles: Meaning and Measured Results
  • Two- and Three-Candle Patterns: Engulfing, Morning and Evening Stars, Soldiers and Crows

Part 5. Chart patterns

From head and shoulders to cup and handle: shape, confirmation, measured targets and how subjective they are.

  • Head and Shoulders Pattern: Neckline, Confirmation and Measured Target
  • Double Top and Double Bottom Patterns (M and W): Confirmation and Target
  • How to Read Triangle Patterns: Symmetrical, Ascending and Descending
  • Flag and Pennant Patterns: The Short Pause After a Sharp Move
  • Rising and Falling Wedge Patterns: Converging Lines That Slope the Same Way
  • Cup and Handle Pattern: The Rounded Cup, the Handle and the Rim Breakout

Part 6. Reading signals together

Divergence, multiple timeframes, and futures data such as funding rates and open interest.

  • How to Read Divergence: Regular and Hidden, Bullish and Bearish
  • Multi-Timeframe Analysis: Higher Timeframes for Direction, Lower Timeframes for Location
  • Funding Rate, Open Interest and Long/Short Ratio: Reading Futures Crowding

Part 7. Testing and risk

How to read a backtest, stop distance and position size, and the limits of chart analysis.

  • How to Read Backtest Results: What to Check Before Returns, and Common Pitfalls
  • How to Set Stop-Loss Distance and Position Size: Start With How Much You Risk per Trade
  • The Limits of Chart Analysis: Confirmation Bias, Hindsight and Other Common Illusions

What this course does not say

The course explains what charts summarize and what they cannot. It does not say when to buy or sell or how much to risk. In the measurements, the share of rises after most patterns and signals differed from the any-candle baseline by only a few percentage points. Charts are most useful for summarizing what happened, measuring risk and following your own plan consistently.

🗂️ Related entries

📉

How to Read a Candlestick Chart: Four Prices, Body and Wicks

Every candle holds four prices: open, high, low and close. What the body and wicks tell you, and what they leave out.

⏱️

How to Choose a Timeframe: Why the Same Chart Looks Different

A timeframe is just the unit used to group the same trades. What shows up and what disappears when you change the candle length.

📐

Log vs Linear Charts: Why Long-Term Charts Use a Log Scale

A log scale draws equal percentage moves at equal height. How nine years of Bitcoin look different depending on the scale you choose.

📶

How to Read Trading Volume: Why It Should Be Paired With Price

Volume is how much was traded during a candle. How to read it alongside price, from breakouts and climaxes to inflated volume.

🧭

How to Identify a Trend: Market Structure from Highs and Lows

A trend is judged by which way the highs and lows are stacking. We cover how to define a swing and where the structure breaks.

🧱

How to Draw Support and Resistance: Zones, Not Lines

Support and resistance are zones with width, not single prices. Why they form, how to draw them, and the pivot point formula.

📏

How to Draw Trendlines and Channels: From Connecting Lows to Reading a Break

An uptrend line connects lows; a downtrend line connects highs. The third touch, channels, and how to read what follows a break.

🚪

Breakouts vs. Fakeouts: How to Tell Them Apart, and the Limits of Doing So

A wick above resistance and a close above it are different breakouts. The ways to confirm a breakout, and what each one costs.

↔️

How to Spot a Ranging Market and Why Trend Indicators Whipsaw

A range is a stretch where highs and lows do not stack in one direction. Clues for spotting one, and why trend indicators keep flipping.

〰️

How to Read Moving Averages: SMA vs EMA and the Golden Cross Track Record

A moving average is an average of past prices, so it always lags. We compare SMA and EMA and look at what measured data shows after golden crosses.

📈

How to Read RSI: What 70 and 30 Mean and What Real Data Says About Overbought

RSI compares the size of recent gains with recent losses. We use data to check what actually happened after it went above 70.

📊

How to Read MACD: MACD Line, Signal Line, Histogram and Zero Line

MACD is the gap between two exponential moving averages. We look at what each line calculates and what crossovers did in measured data.

🎯

How to Read Bollinger Bands: Bandwidth, the Squeeze and %B

Bollinger Bands add and subtract standard deviations from a 20-bar average. We cover bandwidth, the squeeze, %B and what closes outside the bands did in measured data.

🎚️

How to Read the Stochastic Oscillator: %K, %D and the 80/20 Lines

The stochastic measures where the close sits between the highest high and lowest low of the last 14 bars. We cover fast vs slow and how it differs from RSI.

📏

How to Use ATR to Measure Volatility: Stop Distance and Position Size

ATR measures how far a single bar usually moves. How it is calculated, and how to use it for stop distance and position size.

☁️

How to Read the Ichimoku Cloud: Conversion Line, Base Line, Cloud and Lagging Span

Every Ichimoku line is either a midpoint of past highs and lows or a shifted close. How each is calculated, and what Sanyaku Kouten means.

🚥

How to Read the Supertrend Indicator: The ATR Trailing Line and Its Weaknesses

Supertrend shows direction with one trailing line set a multiple of ATR away from price. The rules that move the line, and its weaknesses.

🌀

How to Draw Fibonacci Retracements: What 0.382, 0.5 and 0.618 Really Are

Fibonacci retracements are prices that divide a swing by fixed ratios. How to draw them, where the ratios come from, and their weaknesses.

🏗️

How to Read Volume Profile and VWAP: POC, Value Area and Anchored VWAP

A volume profile shows volume by price level; VWAP is the volume-weighted average price. How each is calculated, and the limits of reading them.

🕯️

Hammer, Shooting Star, Doji and Long Candles: Meaning and Measured Results

How single-candlestick patterns are defined, and what price did next, measured directly on historical Binance candles.

🔄

Two- and Three-Candle Patterns: Engulfing, Morning and Evening Stars, Soldiers and Crows

How patterns read across two or three candles are defined, what the measured data showed, and why the numbers swing when the sample is small.

👤

Head and Shoulders Pattern: Neckline, Confirmation and Measured Target

Three peaks and a neckline. The pattern is complete only on a close below the neckline, and its measured target is a calculation, not a probability.

〽️

Double Top and Double Bottom Patterns (M and W): Confirmation and Target

A shape read from two highs or two lows that stalled near the same price. Until price closes beyond the line between them, it is only a candidate.

🔺

How to Read Triangle Patterns: Symmetrical, Ascending and Descending

Highs and lows converge as the range narrows. This covers the differences between the three types, the measured target and the convention about the apex.

🚩

Flag and Pennant Patterns: The Short Pause After a Sharp Move

A small channel or triangle that forms after a steep rise or fall (the flagpole). What defines the shape, how the measured target works, and its limits.

📐

Rising and Falling Wedge Patterns: Converging Lines That Slope the Same Way

Two lines that slope in the same direction while narrowing. How wedges differ from triangles and channels, and why interpretations of them split.

Cup and Handle Pattern: The Rounded Cup, the Handle and the Rim Breakout

A rounded U-shaped bottom (the cup) and a shallow pullback (the handle), followed by a move above the rim. Its conditions and its limits on crypto charts.

🔀

How to Read Divergence: Regular and Hidden, Bullish and Bearish

What it means when the highs and lows of price and RSI point in different directions, and why divergence always shows up a few bars late.

🪜

Multi-Timeframe Analysis: Higher Timeframes for Direction, Lower Timeframes for Location

How to read a chart that is rising on the daily but falling on the 1-hour, by stacking timeframes from the top down.

💸

Funding Rate, Open Interest and Long/Short Ratio: Reading Futures Crowding

What perpetual futures funding rates, open interest and the three long/short ratios each measure, and the limits of reading them.

🧪

How to Read Backtest Results: What to Check Before Returns, and Common Pitfalls

Maximum drawdown, costs, look-ahead bias and overfitting: the things to check before you trust the numbers a backtest gives you.

⚖️

How to Set Stop-Loss Distance and Position Size: Start With How Much You Risk per Trade

Decide how much you can afford to lose first, then work back from your stop level to the quantity, plus the arithmetic of losing streaks.

🧠

The Limits of Chart Analysis: Confirmation Bias, Hindsight and Other Common Illusions

Patterns show up even in prices made by flipping coins. The illusions that are easy to fall into when reading charts, and where charts are still useful.

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