Reading Chart Patterns

Technical analysis is based on the premise that historical price patterns repeat themselves. By understanding candlestick charting and structural support/resistance, you can identify high-probability entry and exit zones.

Candlestick Basics

Each Japanese candlestick represents price action over a specific timeframe (e.g., 1 hour, 1 day) and details four prices: 1. Open: The starting price of the period. 2. Close: The ending price of the period. 3. High: The highest price reached during the period. 4. Low: The lowest price reached during the period.

A Green (Bullish) Candle indicates the close price was higher than the open. A Red (Bearish) Candle indicates the close price was lower than the open.

Support & Resistance (S&R) S&R zones are the horizontal keys of charting: * **Support**: A price level where buying pressure historically prevents the price from falling further. Think of it as a floor. * **Resistance**: A price level where selling pressure historically prevents the price from rising further. Think of it as a ceiling.