Even if you are already trading, if you are new to investing knowing your way around a financial chart may feel like trying to read a foreign language. The screen is a large cluttered clutter of red and green bars, zig-zagged lines, and confusing graphs. It’s confusing.

But what if you could learn the basic grammar of that language?

That’s what technical analysis is. It’s not a magic crystal ball that guarantees the future. It’s a skill that allows you to assess past behaviors in the market to look for patterns and likelihoods. It’s about making informed guesses, not blind bets.

This guide is your “ Rosetta Stone” for financial charts. We’ll break down the absolute essentials of technical analysis into simple, easy-to-understand concepts. This is your first step in learning how to read the story the market is telling you.

Part 1: What is Technical Analysis?

Technical analysis is studying past price action and volume to predict future price action.