Good morning, how are you?! This is my first article regarding technical analysis and it won't be the last, I will try in this article to set you on the right path and show you how enjoyable and easy analysis can be :)
First: Support and resistance
This is the first step in learning technical analysis, knowing what a support area means, how to discover it, and what a resistance area means.
Simply put, the support area is a buying zone so dense that the price bounces back from it immediately if the support is strong. Let's take an example of any currency, let’s say the watermelon currency: suppose the price of the watermelon currency is $10, and I went to an excellent watermelon analyst to advise me whether to buy it at this price? He told me no, but when it drops to $6, buy it.
I wonder why $6 specifically?! Yes, because this area is crowded with many buy orders and also because the currency has reached this number before and then bounced back from it.
As for the resistance area, it is a zone crowded with sell orders, in addition to the fact that the currency has touched it before and could not break through it.
There is strong resistance that the currency may not be able to break easily, and there is weak resistance that the currency can break easily due to the lack of sell orders in this area, also regarding support, there is strong support and weak support.
To simplify things further, there is a video on YouTube called Verified Support & Resistance Trading Strategy that will help you easily determine support and resistance areas.
2. Secondly: The classical school
I present the most enjoyable analytical method, which consists of patterns that you can predict the price through memorizing them, but there are other supportive methods because the classical school has advantages and also lacks many things that help you determine the price direction.
By the way, there is an Arabic YouTube channel called WolfCharts that contains educational videos about classical analysis, as well as support and resistance levels, and I personally benefited from it.
3. Thirdly: Harmonic patterns
This is the only time I spent money to learn it, and I will explain it for free with examples, but in another article so as not to prolong it for you, and it basically relies on Fibonacci ratios to determine ideal entry and exit zones.
I will explain examples of the Gartley pattern, the butterfly pattern, in addition to the Cypher pattern.
At the end of the article, I hope I have succeeded in providing something useful and easy.