Imagine technical analysis as your trading superpower—a way to see hidden patterns, predict trends, and spot opportunities others miss. In this guide, we'll unlock the secrets of Moving Averages, RSI, MACD, and Fibonacci Retracements. By the end, you'll read charts like a pro and trade with laser focus. Let’s decode the market’s DNA!
Charts are the trader’s crystal ball. Technical analysis (TA) uses historical price data to forecast future moves. It’s not magic—it’s math, patterns, and psychology combined. Master TA, and you’ll trade with confidence!
What They Do: Smooth out price noise to show trends.
SMA (Simple Moving Average): Average price over X periods. "The steady tortoise."
EMA (Exponential Moving Average): Weights recent prices more. "The speedy hare."
How to Use:
What It Does: Measures speed of price moves on a 0–100 scale.
Overbought: RSI > 70 → Price might drop.
Oversold: RSI < 30 → Price might rise.
Pro Tip: Look for divergences (price vs. RSI mismatch).
What It Does: Tracks trend strength and reversals.
MACD Line: EMA 12 – EMA 26.
Signal Line: EMA 9 of MACD Line.
Histogram: Visualizes the gap between lines.
How to Use:
What It Does: Predicts support/resistance levels using ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%).
How to Use:
Example: Use RSI + Fibonacci to confirm entries at key levels.
Warning: Too many indicators = confusion. Stick to 2–3!
Think you've got the TA chops? Let's test your skills!
Now that you've cracked the code of charts, let's explore the forces that move markets!