I’ve spent decades in the trading trenches, and one truth has never changed: charts tell the story before the headlines do. Technical analysis is the language that decodes those charts. Every pattern, line, and indicator reveals what the market is thinking, it’s our job to translate that story into profitable trades. In this guide, I’ll share the core techniques I rely on: chart patterns, trendlines, key indicators, and how to combine them with market psychology and risk management.

Technical analysis studies price and volume history to forecast market moves. Essentially, we look for trends and turning points. I've seen prices move in waves driven by human emotion and supply-demand forces. Instead of chasing news, I focus on charts for clues: trendlines or support levels often act like invisible magnets, highlighting where price may turn. The goal is simple: use objective signals to plan entries and exits. Technical analysis works on any timeframe, from five-minute day trades to multi-year investments. A few key ideas make everything click:

⚫   Trend Identification: Find whether the stock is in an uptrend, a downtrend, or sideways. Aligning your trades with the                      dominant trend (the adage is "the trend is your friend") generally puts the odds in your favor.

⚫   Support & Resistance: Horizontal levels where price often pauses or reverses. A breakout above resistance can signal                    strength, while a drop below support signals weakness.

⚫   Chart Patterns & Indicators: Shapes on charts (such as triangles, flags, or double tops) and indicators (such as RSI or                    moving averages) help measure momentum and hint at reversals.

Think of technical analysis as both art and science. Charts show the artful price moves; indicators provide the scientific details. Together, they guide you toward high-probability trades.

One of the first skills I learned was drawing trendlines and identifying chart patterns. These formations often indicate where the price will go next. Here are a few key examples:

⚫   Trendlines & Channels: Draw a line along a series of higher lows (in an uptrend) or lower highs (in a downtrend). Parallel                trendlines form channels. A breakout from these lines often signals that the trend is accelerating or reversing.

⚫    Head & Shoulders (and Inverse): A classic reversal pattern. It has three peaks (head and two shoulders) or three troughs                (inverse). Breaking the 'neckline' after the right shoulder often signals the end of the trend.

⚫    Double Top/Bottom: Price forms two similar highs (a double top) or two similar lows (a double bottom). Once price breaks              out of the middle point, it often reverses direction (down for a top, up for a bottom).

⚫    Triangles (Symmetrical, Ascending, Descending): Triangles are consolidation patterns. Converging trendlines show                       indecision. A breakout from a triangle usually follows the prior trend, so the direction of the breakout gives a clue.

⚫     Flags and Pennants: Small rectangles (flags) or small converging patterns (pennants) that form after sharp moves. They are           usually continuation patterns – for example, in a strong uptrend, a bullish flag often breaks out to the upside.

⚫     Cup and Handle: A U-shaped "cup" followed by a short downward "handle." It forms in an uptrend. When price breaks                   above the handle, it often continues higher.

⚫     Candlestick Patterns: Watch for single- or multi-candle formations. For example, a Doji (tiny body) can signal indecision, a             Hammer/Hanging Man (long lower wick) can signal reversals, and an Engulfing Candle (one candle fully covers the previous           candle) can indicate a decisive turn. These can reinforce other signals.

Each pattern works best in context. For example, a double bottom at a significant support level is stronger than one in isolation. Always look for confirmation with volume or other signals.

Beyond chart shapes, I rely on a few indicators that quantify momentum and volatility. Over time, I've found a handful that consistently add value:

⚫    Moving Averages (MA): These smooth out price data. I often watch the 50-day and 200-day MAs. A crossover (like the 50-           day crossing above the 200-day, the "Golden Cross") can signal a new trend. Moving averages also act like dynamic                       support or resistance.

⚫    MACD (Moving Average Convergence Divergence): This oscillator shows the relationship between two EMAs. When the               MACD line crosses above its signal line, momentum is turning positive (and vice versa). I also look for divergences: if the                 price is rising but MACD is falling, the rally might be weakening.

⚫     RSI (Relative Strength Index): RSI ranges from 0–100 and flags overbought (above ~70) or oversold (below ~30) conditions.           I use RSI to gauge if a move is extended. For instance, if a stock is hitting new highs but RSI is dropping, it might be time to             take profits.

⚫     Stochastic Oscillator: Similar to the RSI, this shows whether the price is at an extreme relative to its recent range. Crosses             above/below the 80 or 20 levels can flag trend turns. It's another way to spot overbought or oversold conditions.

⚫     Bollinger Bands: These bands expand and contract with volatility. When price 'walks the band' (rides the upper band),                   momentum is strong. A narrow band (a "squeeze") often precedes a big move. I watch how price interacts with the bands               for clues on volatility shifts.

⚫     Volume: Always check volume. A chart pattern or breakout is far more credible if volume confirms it. For example, if a price           breaks out on heavy volume, many traders are left behind. If volume is light, the breakout may fail.

⚫     VWAP (Volume Weighted Average Price): On intraday charts, VWAP shows the average price weighted by volume.                         Institutions often pay attention to VWAP, so intraday reversals or bounces around VWAP can be essential levels.

When I analyze a trade, I usually use a combination of these. For example, a moving average crossover might look good, but I'll confirm with RSI or volume. No single indicator is perfect, but together they paint a clearer picture of momentum and risk.