Technical analysis assumes that all available information is already reflected in the price and that crowd behavior repeats. Its job is not to predict the future but to find zones where the reward-to-risk ratio favors the trader.

Support and resistance levels are the foundation. These are price zones where the market previously reversed or stalled: buyer and seller interest is concentrated there. The more touches a level has and the “older” it is, the more significant the reaction.

The trend defines context: a sequence of higher highs and higher lows is an uptrend; lower highs and lower lows — a downtrend. Trading with the trend is statistically more reliable than counter-trend trades, so the first question to any chart is: “where is the market going on the higher timeframe?”

Moving averages (MA) smooth out noise and visualize the trend. Popular periods are 20, 50 and 200. Price above the MA200 means the global context is bullish; crossovers of fast and slow averages are used as a signal filter, not as a standalone system.

The Relative Strength Index (RSI) measures momentum: readings above 70 suggest overbought conditions, below 30 — oversold. In a strong trend the RSI can stay in extreme zones for a long time, so indicator signals are always cross-checked against levels and market structure.

Volume confirms the move: a breakout on rising volume deserves trust, while a thin, volume-less spike is often a trap. Together these five tools cover 90% of a beginning technical analyst’s needs.