Technical Analysis
How to read a chart, in the order the pieces build on each other.
How to read a chart
Technical analysis is the study of what price has already done, on the assumption that the same conditions tend to produce the same behaviour. It is not forecasting. The five shelves are numbered because they build on each other — levels first, then lines, then the shapes they make, then the arithmetic laid over them, and last the structure that says whether any of it applies.
Read them in orderSupport & resistance4
Prices the market remembers
Before any tool or pattern, a chart offers one thing: prices where something happened before, and keeps happening again. A level is not magic and it is not a prediction — it is a record of where enough orders sat to stop a move, and of the traders who remember being stopped there.
Support
Floor
A price that buyers have defended more than once.
- What it says
- Sellers reach it and stop. Each touch that holds makes it better known.
- Where it fails
- Every level breaks eventually. The third touch is weaker than the first.
Resistance
Ceiling
The mirror image — a price that sellers keep defending.
- What it says
- Rallies die in the same place. Someone is filling orders there.
- Where it fails
- A level with only one touch is not a level yet, it is a high.
The Flip
Role reversal
Broken resistance becomes support, and the reverse.
- What it says
- The traders who sold there are now wrong, and buy it back to get out flat.
- Where it fails
- It only flips if price actually closed through — not just wicked past.
Zones, Not Lines
Precision
A level is a band a few pips deep, never a single price.
- What it says
- Orders cluster around round numbers, not on them.
- Where it fails
- A stop placed at the exact line gets taken out by the noise inside the zone.