Module 2: Technical analysis

Technical analysis studies what price and volume have done, so a trader can describe the current picture clearly and plan entries, exits and stops around it. It does not foretell the future; it organises what is already on the chart.

01What a chart shows

A chart plots price over time. Line, bar and candlestick charts show the same data at different levels of detail; most traders use candlesticks because each one shows the open, high, low and close of its period.

02Timeframes

The same market looks different on a 1-minute, 15-minute and daily chart. Traders usually read a higher timeframe for the trend and a lower one for timing.

03Single and multiple candlestick patterns

Hammers, dojis, engulfing candles and stars describe a shift in who controlled a period. A pattern is a description of what happened, best read together with where it formed.

04Support and resistance

Support is a price area where buying has repeatedly stopped a fall; resistance is where selling has stopped a rise. They are zones rather than exact lines, and they matter most where many traders are watching them.

05Trend and trendlines

Higher highs and higher lows describe an uptrend; the reverse a downtrend. A trendline joins those turning points and gives a reference for when the structure changes.

06Volume

Volume shows how much traded. A move on rising volume has more participation behind it than the same move on thin volume.

07Moving averages

A moving average smooths price into one line. It shows direction clearly, and it always lags, because it is built from the past.

08Oscillators: RSI, MACD and others

Indicators like RSI and MACD measure momentum. They are useful for describing strength and stretch, and like moving averages they react after price has moved.

09Chart patterns

Triangles, flags, double tops and head-and-shoulders describe how price has been coiling or turning. Each has a common reading and plenty of exceptions.

10Building a trade from a chart

A technical trade has an entry, a stop that says the idea was wrong, and a target. The plan comes before the order, not after.

11Where this leads

On A1Stock, SuperChart+ adds the option chain and the order book to the price chart, so support and resistance can be read from where size actually sits, not only from past turns.