Technical analysis is the study of price charts and trading volume to forecast future price movement — without ever looking at a company's earnings or balance sheet. It's the language of professional traders: candlesticks, moving averages, RSI, support and resistance, and chart patterns that have repeated across every market in history.
Technical analysis (TA) is the study of historical price and volume data to forecast future price direction. Its core premise: all known information is already reflected in price. You don't need to know why a stock is moving — the chart tells you where it's been, and patterns tend to repeat because human psychology doesn't change.
TA operates on three principles coined by Charles Dow in the 1880s: (1) the market discounts everything — all news, fundamentals, and sentiment are priced in; (2) prices move in trends — uptrend, downtrend, or sideways; (3) history repeats — because trader psychology repeats. Fear, greed, panic, and euphoria create the same patterns century after century.
TA is particularly useful for timing entries and exits — even if you use fundamental analysis to pick which stocks to own, technical analysis helps you decide when to buy. The best stock in the world can be a bad trade if you buy at the top of an overbought pattern.
Many BBYM graduates who go on to trade or invest professionally use TA daily — not as a crystal ball, but as a risk management tool. Knowing support levels tells you where to place stop-losses. Knowing overbought/oversold conditions tells you when not to chase. This is how traders protect capital.
Every candlestick represents one time period of price action — 1 minute, 1 hour, 1 day, or 1 week. Four data points are packed into every single candle.
Indicators are mathematical calculations applied to price and volume data. No single indicator is a crystal ball — professional traders use 2–3 that complement each other rather than stacking 20 that contradict.
Chart patterns are price formations that signal likely future movement. They work because they represent recurring psychological battles between buyers and sellers that resolve in predictable ways.
Enter price data to compute real indicator values — and see what signals they generate.
The vocabulary of chart readers — from price action to indicator interpretation.