Technical Analysis Fundamentals

Technical analysis is the study of price movements and patterns to predict future market behavior.

Core Principles

Price Discounts Everything

All known information is already reflected in the price.

Prices Move in Trends

Markets tend to move in identifiable trends that persist over time.

History Repeats Itself

Price patterns tend to repeat due to market psychology.

Chart Types

Candlestick Charts

The most popular chart type showing open, high, low, and close prices.

Line Charts

Simple representation connecting closing prices.

Bar Charts

Similar to candlesticks but with a different visual style.

Key Indicators

Moving Averages

• SMA (Simple Moving Average): Equal weight to all periods
• EMA (Exponential Moving Average): More weight to recent prices

RSI (Relative Strength Index)

Measures momentum on a scale of 0-100.

• Above 70: Overbought
• Below 30: Oversold

MACD

Moving Average Convergence Divergence shows trend direction and momentum.

Bollinger Bands

Volatility indicator with upper, middle, and lower bands.

Support and Resistance

Support

Price level where buying interest is strong enough to overcome selling pressure.

Resistance

Price level where selling pressure overcomes buying interest.

Chart Patterns

Reversal Patterns

• Head and Shoulders
• Double Top/Bottom
• Triple Top/Bottom

Continuation Patterns

• Flags and Pennants
• Triangles
• Rectangles

Using Technical Analysis with AI

Neura AI combines traditional technical analysis with machine learning to:

• Identify patterns automatically
• Calculate probability of pattern completion
• Suggest optimal entry and exit points