š What is Technical Trading?
Technical trading is a strategy where traders make buy or sell decisions based on price charts, patterns, and technical indicators, rather than news or financial reports.
---
š§ Core Elements of Technical Trading:
1. Price Charts
Most common: Candlestick Chart ā each candle shows price movement over a specific time.
Others: Line chart, Bar chart.
2. Trend Analysis
Uptrend ā Price is moving higher š
Downtrend ā Price is falling š
Sideways ā Price is stable or moving within a narrow range ā”ļø
3. Support and Resistance
Support ā A price level where the asset tends to stop falling and may bounce up.
Resistance ā A price level where the asset tends to stop rising and may fall.
4. Technical Indicators These tools help identify entry and exit points:
RSI (Relative Strength Index) ā Detects overbought or oversold conditions.
MACD (Moving Average Convergence Divergence) ā Shows trend and momentum.
Moving Averages (SMA/EMA) ā Smooths out price data to spot trends.
Bollinger Bands ā Measures market volatility.
5. Chart Patterns Traders look for repeating price shapes to predict future movement:
Head and Shoulders
Double Top / Double Bottom
Flags, Pennants, Triangles, etc.
---
ā Goal of Technical Trading
To predict price direction and time the best entry
or exit points using tools and patterns found on price charts.