Introduction to Technical Analysis

Learn the foundation of technical analysis, including price charts, trends, support and resistance, volume and common chart-reading concepts.

Introduction to Technical Analysis

Technical analysis is a method of studying market price and volume information to understand historical behaviour and identify possible market scenarios.

Price Charts

Charts present historical price information visually. Common chart formats include line charts, bar charts and candlestick charts.

Understanding Trends

A trend describes the general direction in which price has been moving over a selected period. Learners commonly study upward, downward and sideways market structures.

Support and Resistance

Support refers to a price area where buying interest has historically appeared, while resistance refers to an area where selling pressure has historically appeared. These are concepts rather than guaranteed price levels.

Volume

Volume represents trading activity. Studying price together with volume can provide additional context when analysing historical market behaviour.

Technical Analysis Requires Context

No chart pattern or indicator can guarantee the future direction of a security. Technical analysis should therefore be studied together with risk management and disciplined decision-making.