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Technical Analysis

Technical analysis for beginners: how to read candlestick charts, draw support and resistance, and use moving averages, RSI and MACD, with clear examples and honest notes on what indicators cannot do.

These technical analysis guides teach you to read price charts and the most common indicators. Technical analysis studies past price and volume to judge the odds of future moves and to plan where to enter, exit and cut losses. It applies to stocks, ETFs, crypto and forex alike.

Start here

  1. Technical analysis for beginners: the complete starter guide.
  2. Candlestick patterns for beginners.
  3. Support and resistance explained.
  4. Moving averages: SMA vs EMA.
  5. RSI indicator explained.
  6. MACD for beginners.

Key concepts

Price action and candlesticks

A candlestick shows four prices for a period: open, high, low and close. A green or hollow body means price closed higher than it opened; red or filled means lower. Patterns of candles hint at shifts in buying and selling pressure.

Trend, support and resistance

A trend is a series of higher highs and higher lows (uptrend) or the reverse. Support is a price area where buying has repeatedly stopped declines; resistance is where selling has capped rallies. These zones help you place stop losses and targets.

Indicators

Moving averages smooth price to show direction. The RSI measures momentum on a 0 to 100 scale, with readings above 70 or below 30 traditionally called overbought or oversold. MACD compares two moving averages to show changes in momentum. All indicators are calculated from past prices, so they lag.

Example: A 5-day simple moving average of closing prices $10, $11, $12, $11 and $13 is ($10 + $11 + $12 + $11 + $13) / 5 = $57 / 5 = $11.40.

Risk note

No pattern or indicator works every time, and signals that look clear in hindsight often fail in real time. Combine any setup with fixed risk per trade, as explained in our risk management guide, and test ideas on a demo account first. See the trading hub for more.

Technical Analysis: frequently asked questions

Is technical analysis reliable?

It is a tool for managing probabilities, not a reliable predictor. Results depend on the market, the time frame and, above all, the trader's discipline. Pair it with strict risk management.

Which indicator is best for beginners?

Many beginners start with moving averages to read the trend and RSI to gauge momentum, because both are simple to interpret. Using one or two indicators well beats stacking many. Learn price action and support and resistance first.

What time frame should beginners use?

Daily charts are a common starting point because they filter out much of the noise and do not require constant screen time. Shorter time frames produce more signals but also more false ones and higher costs.