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    Introduction to Technical Analysis: Charts & Patterns

    Technical analysis uses chart patterns to predict future price movements. Learn the basics here.

    By Gajji Srinath6 min read

    Technical analysis is the art of reading chart patterns and price action to identify trading opportunities.

    Core Assumptions

    1. Market Discounts Everything: The price reflects all known information.
    2. Price Moves in Trends: Prices tend to move in uptrends, downtrends, or sideways ranges.
    3. History Repeats Itself: Chart patterns tend to recur because human psychology doesn't change.

    Basic Tools

    • Candlestick Charts: Show open, high, low, and close prices.
    • Support & Resistance: Levels where price tends to stop and reverse.
    • Moving Averages: Smooth out price action to identify trends.

    Fundamental vs. Technical

    While Fundamental analysis looks at the business (earnings, debt), Technical analysis looks only at the price and volume data.