Decoding Money Flow Charts: My Personal Experience

What a headache I had the first time I tried to understand those darn charts! If you feel lost like I was, don't worry. I'm going to explain how I interpret these money flow analyses in cryptocurrencies without so much technical jargon.

The flow of money: what really matters

Essentially, this shows whether people are putting money into or taking money out of a crypto. Simple: are they buying or selling? This has saved me from several financial disasters, believe me.

The charts you should know

The candlestick chart was my initial nightmare. Each candle represents time: green means up, red means down. The “wicks” show highs and lows. When I see several green candles in a row, I tend to think that something good is happening, although sometimes I have been disappointed.

The trading volume seems fascinating to me. It’s those bars below that show how many people are trading. A high volume with green candles usually indicates collective enthusiasm, but be careful, it can also be manipulation.

The accumulated flow is my favorite. If it's positive, money comes in; if it's negative, money goes out. Although I've learned the hard way that it doesn't always work as I expected.

Practical application

When I want to buy, I first examine these charts. If I see an upward trend with decent volume, I usually enter. But if I see many red candles and money flowing out, I wait. This strategy has worked quite well for me, although I have also made huge mistakes by following it blindly.

Realities that nobody tells you

Charts are not infallible. I have seen “perfect” patterns crumble in seconds. Additionally, they work the same for any crypto, but each has its own personality. And remember: this market is unpredictable, no matter how much the “experts” say otherwise.

The true secret lies in practice and developing your own instinct. Charts are tools, not oracles. I use them as a guide, but never as absolute truth. Over time, you will start to see things that others do not see, even if they are sometimes just mirages.