Understanding Technical Analysis_2. Basic Components

Lesson 2: Basic Components

Technical analysis is mainly chart-bound, despite having a plethora of instruments
and methods.
The charts used by traders basically contain price history visually
demonstrated in graphical form, which helps simplify the search for price patterns.
Price Patterns, be it trend reversal or ranging patterns, are market formations or
moods that raise chances of winning trades.
The trick here is to identify the market's current mood and the duration of that mood
so you can come up with a plan for your technical trades.
Traders have created a series of charting tools to help them determine those
patterns.
First, it begins with support and resistance lines as well as price channels, then it
ends with a large number of technical indicators which are used directly on their
real-time charts.