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Technical Analysis Basics

Trading Mastery

8 min read

Learn to read the market without news using price, volume, and chart structure as your primary information source.

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Fundamental vs Technical Analysis

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Introduction

Technical analysis is the language of charts.

While fundamentals explain why something should move, technical analysis (TA) shows you how it’s moving—right now. It helps traders:

  • Identify trends
  • Time entries and exits
  • Spot support, resistance, and momentum shifts

In this post, you’ll learn the building blocks of TA:

  • Candlestick basics
  • Volume reading
  • Trendlines
  • Support and resistance

This is your visual toolkit as a trader.


1. Candlesticks – The DNA of Price

Candlesticks show what price did during a specific time period.

Each candle contains:

  • Open: where price started
  • Close: where price ended
  • High and Low
  • The candle body shows direction: green = up, red = down

Common Candlestick Types:

  • Doji: Indecision
  • Engulfing candle: Strong momentum reversal
  • Pin bar / hammer: Rejection of a level (wick shows price was rejected)

Think of candles as visual footprints of trader behavior.


2. Volume – The Fuel Behind the Move

Volume shows how many contracts/shares/coins were traded in a candle.

Why it matters:

  • High volume = strong interest, conviction
  • Low volume = indecision, weak moves

Combine volume with price:

  • Price going up + rising volume = healthy move
  • Price going up + falling volume = suspect rally (possible reversal soon)

3. Trendlines – Visualizing Momentum

Trendlines help define directional bias:

  • Connect higher lows in uptrends
  • Connect lower highs in downtrends

They’re not perfect lines—but visual guides.

  • Break of a strong trendline can signal reversal or pause

Think of them as slope indicators: Is the market climbing or sliding?


4. Support and Resistance – The Market’s Memory

Support: Area where buyers have entered in the past

Price bounced from here before → possible bounce again

Resistance: Area where sellers stepped in previously

Price was rejected here → may struggle to break again

These levels often:

  • Create bounce zones
  • Serve as targets or stop areas
  • Get hunted during liquidity grabs (as we saw earlier)

They work because traders remember them—and act on them.


Final Thought

Technical analysis doesn’t predict the future—it tells you the current context.

Used properly, it lets you:

  • Stay on the right side of the market
  • Avoid emotional decisions
  • Build trade ideas based on structure, not noise