Technical analysis
What charts and indicators show, and what they never show.
17 articles
Types of gaps: what actually breaks the price and why a gap does not always fillA gap is a stretch of the chart where no trades took place: the session opened above or below the previous session's close.5 min
Retest of a Level: Why Price Returns to a Broken BoundaryA retest is a return of price to a level it has just broken, followed by an attempt to bounce off it from the other side.4 min
The engulfing candle: what the second candle actually engulfs, and what the signal does not proveAn engulfing pattern is a candlestick pattern made of adjacent candles, in which the body of the engulfing candle completely covers the body of the previous one and closes in the opposite direction.5 min
Point and Figure: The Chart Where a New Column Appears Only After a ReversalA point and figure chart is a way of plotting price without a time axis: a column of Xs grows while the market rises, a column of Os extends downward while the market falls, and a new column begins only when a move in the opposite direction exceeds a threshold set in advance5 min
The RSI indicator: why overbought is about speed, not priceRSI compares the average size of gains with the average size of losses inside a chosen window and expresses that ratio on a normalised scale with hard bounds.5 min
False breakout: who buys your stop beyond the levelA false breakout is a move in price beyond the boundary of a level, after which it returns to the previous range and the candle closes inside it.5 min
The Wedge Pattern: How Converging Boundaries Set It Apart from a TriangleA wedge is a stretch of the chart where the price keeps moving in its previous direction, but each successive impulse is shorter than the one before it, and the boundaries of the move converge while sloping in the same direction.5 min
ATR: what measures the range of a candle and why the indicator is silent on directionATR (Average True Range) answers a single question: how widely an instrument moves over the period you have set for it.6 min
Keltner Channel: Bands Moved by Volatility, Not by PriceThe Keltner Channel is an indicator whose band width depends not on how far price has moved away from its average, but on how wide the candles themselves have become.5 min
Renko: the chart that draws distance travelled, not timeA renko chart is built not on a schedule but on actual price movement: a new brick is added only when the price has travelled a preset distance from the close of the previous brick.5 min
Cup and Handle: What Confirms the Entry and What Cancels ItThe cup and handle is a bullish continuation pattern: a smooth, rounded decline and an equally smooth return to the previous high (the cup), followed by a short, shallow pullback right at the rim (the handle).5 min
The limits of technical analysisIt describes price behaviour and disciplines action. It cannot predict the future, and an honest discussion of it starts there.
Trading volume: the only dimension besides priceHow many securities changed hands. It shows the degree of participation, not the direction.
Overbought indicators: what they actually measureAn overbought indicator does not measure how expensive a security is.5 min
Moving Averages: Smoothing, Not a SignalA moving average predicts nothing: it retells what has already happened in a more readable form.5 min
Support and resistance levels: why they sometimes workA level works not because the price "remembers" the past, but because orders have piled up at that price — limit buys and sells, stop orders, volumes that someone is obliged to execute.6 min
The Candlestick Chart: What One Candle ShowsOne candle is a condensed record of trading over the chosen interval: it shows where dealing began, which extremes the price reached within the interval and how the interval ended.5 min