What is Technical Analysis?
By Rohit Singh · Mr. Chartist, SEBI Registered Research Analyst
Technical Analysis (TA) is the study of past price and volume data to predict future price movements. It's based on three core assumptions: (1) The market discounts everything — all known information is already reflected in the price, (2) Prices move in trends — uptrends, downtrends, and sideways trends, (3) History tends to repeat itself — because human psychology (greed and fear) doesn't change. Unlike fundamental analysis which asks 'what to buy', technical analysis answers 'when to buy and sell'.
Key points
- TA works on any timeframe: 1-minute charts for scalpers to monthly charts for long-term investors
- It works on any asset: Stocks, indices, commodities, forex, crypto — because it studies human behavior through price
- Charles Dow (founder of Dow Jones) created the foundation of modern TA in the late 1800s
- Japanese candlestick charting (developed by Munehisa Homma in the 1700s for rice trading) is the most popular charting method today
- TA is probabilistic, not deterministic — it gives you an 'edge', not certainty. Good setups fail regularly, which is why position sizing and a pre-defined invalidation level matter more than the entry
- Volume is the single most important confirmation tool — price tells you WHAT happened, volume tells you WHO was behind it
- The key to profitable TA is risk management (stop-losses, position sizing) — not finding the 'perfect' indicator
Don't try to learn every indicator and pattern at once. Master these 4 things first: (1) Candlestick patterns, (2) Support & Resistance, (3) Trend lines, (4) Volume analysis. These alone can make you consistently profitable. Everything else is secondary.
Written By
Rohit Singh
Mr. Chartist
With 14+ years of experience in Indian financial markets, Rohit Singh (Mr. Chartist) is a SEBI Registered Research Analyst, Amazon #1 bestselling author, and the founder of Investology — a premium trading ecosystem trusted by a 1.5 Lakh+ strong community across India.