1. Reading price charts
Understand how line charts, bar charts, and candlestick charts represent price movements over different time periods.
TRADING EDUCATION · TECHNICAL ANALYSIS
Learn to read the story behind price movements.
Technical analysis studies historical prices and trading activity to help traders evaluate market conditions. Learn how charts, trends, and indicators can support a structured trading plan.
Technical analysis cannot predict future prices with certainty. Markets can move unexpectedly, and every trading decision involves risk.
THE FOUNDATIONS
What is technical analysis?
Technical analysis involves studying price charts, patterns, trends, and trading activity to assess how a market has behaved. Traders use these observations to develop and evaluate possible entry and exit plans.
It is one approach to analysing markets. It does not guarantee profitable trades, and it is often used alongside risk management and an understanding of market fundamentals.
Focus on evidence, not certainty
A chart can help you organize information, but no pattern or indicator can tell you with certainty what price will do next.
2. Market trends
Learn to identify upward, downward, and sideways price movements, while recognizing that trends can change.
3. Support and resistance
Explore price areas where buying or selling interest has previously appeared. These areas are zones to assess, not guaranteed turning points.
4. Technical indicators
Get introduced to moving averages, the Relative Strength Index (RSI), and other tools used to examine price behaviour and momentum.
5. Use analysis responsibly
Combine observations with clear trading rules, planned exits, appropriate position sizing, and awareness of potential losses.
A simple example
Imagine a stock has been making higher highs and higher lows over several weeks. A trader might interpret this as an upward trend and look for evidence that the pattern is continuing.
However, the trend could reverse, and a chart pattern can fail. A trader should consider what would invalidate the analysis before deciding whether to enter a trade.
Analysis needs risk controls
A possible trading opportunity is not a reason to ignore position sizing, exit planning, or the possibility of loss.
Continue learning
Build your chart-reading skills alongside a strong understanding of trading fundamentals and risk management.
Return to Trading Fundamentals