What is Technical Analysis Basics?
Candlesticks, the handful of chart patterns that matter, and moving averages — your first real toolkit.
Definition
Technical analysis reads price history for clues about the next move. Three beginner staples: candlesticks (each candle shows the open, high, low and close of a period — the body is direction, the wicks show where price was rejected); chart patterns (a few reliable ones — triangles compress before a breakout, head-and-shoulders signals trend exhaustion, flags signal continuation); and moving averages (a smoothed price line — the 20/50/200 mark short/medium/long trend; price above a rising average is a bullish lean).
Why it matters for trading
- Candlestick context (a long lower wick at support = buyers defending) tells you who won the fight for that period — far more than the close alone.
- Patterns are not magic — they are a shorthand for supply/demand pressure building up. They work better as confirmation than as standalone signals.
- Moving averages keep you honest about the trend so you stop buying dips in a downtrend.