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๐ฐ Basic Technical Analysis for Beginners
1. Understand Price Charts
Candlestick Charts are most commonly used.
Each candle shows 4 things: Open, High, Low, Close (OHLC).
Colors: Typically green (up) and red (down).
2. Key Concepts
Support: A price level where buyers step in (price tends to bounce up).
Resistance: A price level where sellers step in (price tends to fall).
Trend: Direction of the market โ uptrend, downtrend, or sideways.
Volume: Shows the strength of a move (high volume = strong move).
3. Common Indicators
Moving Averages (MA):
Simple MA (SMA): Average of closing prices.
Exponential MA (EMA): More weight to recent prices.
Used to spot trends and crossovers (e.g., 50 EMA crossing above 200 EMA = bullish).
RSI (Relative Strength Index):
Measures overbought (>70) or oversold (<30) conditions.
MACD (Moving Average Convergence Divergence):
Shows momentum changes and trend direction.
Bollinger Bands:
Volatility indicator; prices bouncing off bands can signal reversals.
4. Chart Patterns
Bullish Patterns: Double Bottom, Cup and Handle, Ascending Triangle.
Bearish Patterns: Double Top, Head and Shoulders, Descending Triangle.
5. Risk Management
Never invest more than you can afford to lose.
Set stop-loss orders to limit downside.
Use position sizing to manage exposure.
6. Practice Before Real Money
Use paper trading platforms to practice with no risk (e.g., TradingView demo account).
1. Understand Price Charts
Candlestick Charts are most commonly used.
Each candle shows 4 things: Open, High, Low, Close (OHLC).
Colors: Typically green (up) and red (down).
2. Key Concepts
Support: A price level where buyers step in (price tends to bounce up).
Resistance: A price level where sellers step in (price tends to fall).
Trend: Direction of the market โ uptrend, downtrend, or sideways.
Volume: Shows the strength of a move (high volume = strong move).
3. Common Indicators
Moving Averages (MA):
Simple MA (SMA): Average of closing prices.
Exponential MA (EMA): More weight to recent prices.
Used to spot trends and crossovers (e.g., 50 EMA crossing above 200 EMA = bullish).
RSI (Relative Strength Index):
Measures overbought (>70) or oversold (<30) conditions.
MACD (Moving Average Convergence Divergence):
Shows momentum changes and trend direction.
Bollinger Bands:
Volatility indicator; prices bouncing off bands can signal reversals.
4. Chart Patterns
Bullish Patterns: Double Bottom, Cup and Handle, Ascending Triangle.
Bearish Patterns: Double Top, Head and Shoulders, Descending Triangle.
5. Risk Management
Never invest more than you can afford to lose.
Set stop-loss orders to limit downside.
Use position sizing to manage exposure.
6. Practice Before Real Money
Use paper trading platforms to practice with no risk (e.g., TradingView demo account).
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content.ย See T&Cs.
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