Technical analysis is the study of historical price and volume data to identify patterns that may inform future trading decisions.
Core building blocks
- Price charts — commonly candlestick charts — showing open, high, low, and close over a given period.
- Trend identification — recognizing whether a market is moving up, down, or sideways.
- Support and resistance levels.
- Indicators — mathematical calculations derived from price and volume, such as moving averages.
What technical analysis can offer
It provides a structured framework for making entry, exit, and risk-management decisions based on observable data, rather than intuition alone.
What it cannot offer
Technical analysis does not predict the future with certainty. Patterns that worked previously can fail, and no indicator or setup guarantees a specific outcome. It is best treated as one input among several, combined with disciplined risk management.
