Technical Analysis Basics (Beginner Friendly) Guide for Beginners

What Is Technical Analysis?

Technical analysis studies price, volume, and charts to predict future price movement. It assumes:

• Price discounts everything

• History repeats

• Trends persist

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Types of Charts

• Line Chart

• Bar Chart

• Candlestick Chart (most popular)

Key Candlestick Patterns

• Doji – Indecision

• Hammer – Reversal

• Engulfing – Strong momentum

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Support & Resistance

• Support: Buying zone

• Resistance: Selling zone

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Popular Technical Indicators

1. Moving Average (20, 50, 200)

• Trend direction

2. RSI (Relative Strength Index)

• Overbought (>70)

• Oversold (<30)

3. MACD

• Trend + momentum

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Trend Types

• Uptrend

• Downtrend

• Sideways

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Basic Trading Setup Example

• Stock above 50 DMA

• RSI above 40

• Volume breakout

• Stop-loss below support

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Limitations of Technical Analysis

• Not 100% accurate

• False breakouts

• Needs discipline

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Conclusion

Technical analysis is a probability game, not prediction. Combine it with risk management for consistent results.