Each candle on the Binance chart represents the price movement over a specific time period: the red (or green) body indicates the direction of the price change, the upper and lower wicks represent the highest and lowest prices, and the top and bottom of the body are the opening and closing prices. Superimposed on the chart, MA (Moving Average), MACD (Moving Average Convergence Divergence), and RSI (Relative Strength Index) are the three most widely used technical indicators by global traders. They use mathematical formulas to smooth and compare historical prices, helping you determine trend directions, momentum strength, and overbought or oversold conditions. To start reading charts, it is recommended to visit the Binance official website trading page and set the main chart to a 1-hour timeframe, or use the Binance official APP Pro interface in landscape mode. For your first download, refer to the iOS installation guide to ensure you get the official version with the complete indicator library. This article covers everything from chart basics to the practical application of the three major indicators, allowing beginners to build a complete chart reading framework in just 1 hour.
The Four Key Prices in a Candlestick
Every candlestick is essentially an OHLC (Open/High/Low/Close) structure:
- Open: The price of the first trade in the period
- High: The highest price reached during the period
- Low: The lowest price reached during the period
- Close: The price of the last trade in the period
On Binance, by default, Green (Bullish candle) means Close > Open, and Red (Bearish candle) means Close < Open. The length of the "body" reflects the strength of buyers or sellers, and the "wicks" reflect the intensity of the struggle. Typical patterns: long upper wick = overhead resistance, long lower wick = underlying support, Doji = balance between buyers and sellers.
How to Choose a Timeframe? Start with 4 Hours
Binance supports 14 timeframes: 1m, 3m, 5m, 15m, 30m, 1h, 2h, 4h, 6h, 12h, 1D, 3D, 1W, 1M. Rules of thumb:
- Day Trading (buying and selling within a day): 5-minute and 15-minute
- Swing Trading (holding for 3-10 days): 1-hour and 4-hour
- Trend Trading (holding for weeks or more): Daily and Weekly
For beginners, the 4-hour chart is highly recommended. It filters out short-term noise while maintaining enough data points. With only 6 candles a day, it won't cause the anxiety of frequent trading.
MA (Moving Average): The Simplest Trend Indicator
MA simply calculates the arithmetic average of the closing prices of the last N candles and connects them into a line. Binance displays MA5, MA10, and MA30 by default.
How to read it:
- Price > MA: Short-term bullish
- MA sloping upward: Upward trend
- Short-term MA crossing above long-term MA = Golden Cross (Buy signal)
- Short-term MA crossing below long-term MA = Death Cross (Sell signal)
Practical parameters:
- Intraday: MA5/MA20
- Swing: MA20/MA60
- Long-term: MA50/MA200 (commonly used by institutions)
When MA50 crosses above MA200 from below, it forms the famous "Golden Cross". Historical data shows that after this signal appears for BTC, the average gain in the next 6 months is about 47%. The opposite "Death Cross" often indicates a mid-term correction.
MACD (Moving Average Convergence Divergence): Judging Momentum Changes
MACD consists of three parts:
- DIF Line (Fast line): EMA12 - EMA26
- DEA Line (Slow line): 9-day EMA of DIF
- Histogram: 2 × (DIF - DEA)
Three core uses:
- Golden/Death Cross: DIF crosses above DEA = Buy, crosses below DEA = Sell
- Zero Line Crossover: Both DIF and DEA crossing the zero line confirm a trend reversal
- Bullish/Bearish Divergence: Price hits a new high but MACD histogram does not = Bearish Divergence (beware of pullbacks), and vice versa for Bullish Divergence (potential bottom)
To add it on the Binance chart, go to "Indicators" in the top right corner → search for "MACD" → click "+". The default parameters (12,26,9) do not need to be changed.
RSI (Relative Strength Index): Identifying Overbought and Oversold
The formula for RSI is: RSI = 100 - 100 / (1 + RS), where RS = Average gain of N periods / Average loss. The default parameter is 14 periods.
Three key levels:
- RSI > 70: Overbought zone, upward momentum is exhausted, beware of pullbacks
- RSI < 30: Oversold zone, downward momentum is depleted, potential rebound
- RSI = 50: Bull/bear balance line
Three practical techniques:
- Divergence Signal: Price reaches a new high but RSI does not = momentum exhaustion
- 50-Line Breakout: RSI breaking above 50 confirms a strengthening trend
- Double Top/Bottom: RSI repeatedly entering the overbought/oversold area without extending often signals a reversal
The crypto market is highly volatile, and RSI often stays above 80 in strong uptrends. Do not sell just because it is overbought; combine it with trend analysis.
Comparison of the Three Indicators
| Indicator | Type | Main Use | Lag | Recommended Timeframe |
|---|---|---|---|---|
| MA | Trend | Direction | Medium | All |
| MACD | Momentum | Reversals | High | 1h and above |
| RSI | Oscillator | Overbought/Oversold | Low | All |
The "Golden Signal": Combining All Three
A single indicator can easily lead to false signals. Experts usually look for a convergence of three indicators before opening a position:
Bullish Convergence:
- Price stays above MA20 and MA20 is sloping up
- MACD Golden Cross and the histogram turns green (or positive)
- RSI rises from below 30 and breaks above 50
Bearish Convergence:
- Price drops below MA20 and MA20 is sloping down
- MACD Death Cross and the histogram turns red (or negative)
- RSI falls from above 70 and drops below 50
The probability of convergence signals appearing is about 15% of all candles, but the win rate can reach about 65%, much higher than the 50% of a single indicator.
Top 4 Common Mistakes by Beginners
Mistake 1: Over-reliance on small timeframes. 90% of the 1-minute chart is noise. Focusing only on small timeframes leads to overtrading. Always check the higher timeframe for the overall trend before using smaller timeframes for entry.
Mistake 2: Blind faith in a single signal. Technical analysis is a game of probabilities, and the win rate of any single signal rarely exceeds 60%. Learn to set stop-losses and accept a ~40% error rate.
Mistake 3: Constantly tweaking indicator parameters. Many people obsess over optimizing parameters. In reality, the default settings are the result of long-term practical testing. Blind adjustments will only mess up your rhythm.
Mistake 4: Ignoring trading volume. Price + volume is the complete language of the market. A rising price with a growing MACD histogram but shrinking volume is a false breakout.
6 Hidden Features of the Binance Chart
- Double-click a candle: Quickly add a horizontal price line (useful for drawing support/resistance)
- Long-press a candle: Display crosshairs to see the exact price and time
- Expand button (top right): View the chart in full screen or landscape mode
- Drawing tools: Supports over 20 types, including trendlines, Fibonacci, and channels
- Save chart layouts: Sync across multiple devices when logged in
- Multi-timeframe comparison: View 4 timeframes simultaneously on one screen
Conclusion
Charts are not crystal balls, but the combination of MA for trends, MACD for momentum, and RSI for strength is enough to help you spot high-probability opportunities amidst the chaos. Beginners are advised to practice on the 4-hour timeframe for a month using small positions to verify signals and build their own trading rhythm. Remember: reading charts is only 30% of trading; position sizing and psychology make up the other 70%.