Trading Strategies6 min read
How to Read a DEX Chart: Candlesticks, Volume, and Liquidity
A beginner-friendly guide to reading DEX trading charts — candlestick patterns, volume analysis, and what the data tells you.
Candlestick Basics
Each candlestick represents a time period (1 min, 1 hour, 1 day) and shows four prices:
- Open: Price at the start of the period
- Close: Price at the end
- High: Highest price during the period
- Low: Lowest price during the period
Green candles: close > open (price went up). Red candles: close < open (price went down).
Key Patterns
Bullish Patterns
- Hammer: Small body, long lower wick — buyers rejected lower prices
- Engulfing: Large green candle completely covers previous red candle
- Morning star: Three-candle pattern signaling reversal from downtrend
Bearish Patterns
- Shooting star: Small body, long upper wick — sellers rejected higher prices
- Evening star: Three-candle pattern signaling reversal from uptrend
- Bearish engulfing: Large red candle covers previous green candle
Volume Analysis
- Volume confirms trends: Rising price + rising volume = strong trend
- Volume divergence: Rising price + falling volume = weakening trend
- Volume spikes: Often mark turning points or significant events
DEX-Specific Considerations
- Liquidity depth: Check if there is enough liquidity for your trade size
- Price impact: Large trades on thin pools will move the price significantly
- Pool composition: Monitor how much of each token is in the pool
Tools for DEX Chart Analysis
- DEX Screener: Real-time charts for all DEX pairs
- GeckoTerminal: Multi-chain DEX analytics
- Defined.fi: On-chain data visualization
Trading on Alkizen
While Alkizen focuses on execution rather than charting, you can use external charting tools to identify your entry points, then execute trades through Alkizen for the best cross-chain rates.