Technical analysis is the study of where orders are likely resting and how price behaves when it reaches them. It works in layers: market structure sets direction, support and resistance mark decision levels, candlesticks record what happened, and indicators measure. It estimates odds, never certainty.
Market structure
Structure comes first. An uptrend makes higher highs and higher lows. A downtrend makes lower highs and lower lows. Anything else is a range. A break of structure happens when price violates the swing point that defined the trend, and it suspends your bias until new structure forms. Higher-timeframe structure is external and lower-timeframe structure is internal. Do not confuse the two. Learn this on a bare chart before you add anything. Read market structure and liquidity for the full method.
Support and resistance
Draw levels as zones, not lines. A sensible width is about 0.5 × ATR. Judge a level by the size of its reaction, its timeframe and its recency. More touches do not make it stronger, because each touch uses up resting orders. Levels almost always fail when a fundamental catalyst removes the reason the market respected them, so check the calendar first. See how to draw support and resistance.
Trends and breakouts
Markets range roughly 70% of the time. Trend systems lose small amounts often and depend on the trending minority, so you must identify the regime and stand aside when neither approach applies. See trend following.
Breakouts are where most retail money is lost, because stops cluster beyond obvious levels. Wait for a close beyond the level, trade the retest, or trade the failure. Our breakout guide covers false breaks.
The pullback is the highest-quality trend trade. Plan it where several reasons overlap, then require a trigger on a lower timeframe, such as a rejection candle. The best trades feel bad, because price is moving against the trend.
Candlesticks and chart patterns
A candle is a record, not a signal. The same pin bar means different things at a weekly high and in the middle of a range, so location decides. Nearly every reliable chart pattern restates market structure or a level. Learn those first. Read candlestick patterns and chart patterns.
Indicators
Every indicator is a transformation of price and adds no new information. Their honest use is consistency: they turn a judgment into a testable condition. RSI above 70 in a strong trend means the trend is strong, not that you should sell. Divergence shows deceleration, not reversal. ATR is the most underrated tool in retail trading: place your stop beyond invalidation plus 0.5–1.5 × ATR. Forex has no real volume, only tick volume. Guides: moving averages, RSI, MACD and volume spread analysis.
Confluence, timeframes and next steps
Confluence means independent methods agreeing. Four oscillators agreeing is one opinion. Use three timeframes, each roughly 4–6× the one below: the higher sets bias, the middle the setup, the lower the trigger. Always work top down. Test your rules with how to backtest a strategy. Then read strategy and risk, because the invalidation level is worth more than the entry.
Questions
Does RSI overbought mean I should sell?
No. In a strong uptrend RSI stays above 70 for weeks. Overbought and oversold readings matter only inside a confirmed range. Structure tells you whether you are in one.
How many indicators should I use?
Fewer is better. More indicators add correlated views of the same data and an unearned feeling of certainty.
70–80% of retail investor accounts lose money trading CFDs. This page is education, not advice. All trade examples are constructed composites.
