Technical analysis

Technical analysis is the study of price history to inform timing and risk placement. Used honestly, it gives your trades structure — entries, stops, invalidation points. Used as a crystal ball, it's astrology with candlesticks. Here's the useful core.

Trend: the first question

Before any indicator, ask what price is actually doing: higher highs and higher lows (uptrend), lower highs and lower lows (downtrend), or neither (range). Trading with the prevailing trend doesn't guarantee anything, but fighting it puts probability and financing costs against you. A simple test: is price above or below its 50- and 200-period moving averages, and are those averages rising or falling?

Support and resistance: where your stop lives

Levels where price repeatedly stalled matter — not because lines are magic, but because memory and orders cluster there. Their practical value to a spread bettor is stop placement: a stop just beyond the level that invalidates your idea is a reasoned exit; a stop at "£50 down" is an emotional one. Round numbers (FTSE 10,500, gold 3,000) attract the same clustering. Full guide to support and resistance →

Moving averages and momentum

Moving averages smooth noise and define trend; crossovers are slow but honest. Momentum oscillators like RSI flag stretched moves — useful for not chasing an extended market, weak as standalone buy/sell signals. Every indicator is arithmetic on past prices: none contains information the chart doesn't already show. Full guide to moving averages →

What the evidence says

Be sceptical of anyone selling TA as a profit machine: academic evidence for simple technical rules beating costs is mixed at best, and pattern names (flags, wedges, shoulders) are better at describing the past than predicting the future. The durable value is discipline — predefined entries, exits and invalidation — which is risk management wearing a chart. Pair this page with risk management and test any idea on a demo for a month before staking a pound.