Technical Analysis
Understand how to read stock charts, use technical indicators, and identify trading patterns using Virtual Trading 2.0.
Reading Candlestick Charts
Candlestick charts are the most popular way to visualize price action. Each candle shows four data points: Open, High, Low, and Close (OHLC). A green (or hollow) candle means the price closed higher than it opened; a red (or filled) candle means it closed lower. Patterns like Doji, Hammer, and Engulfing signal potential reversals and are essential tools for any trader.
Candlestick Chart
Key Technical Indicators
Moving Averages (MA) smooth out price data to show trends — the 50-day and 200-day MAs are widely watched. RSI (Relative Strength Index) measures momentum on a 0–100 scale; above 70 suggests overbought, below 30 suggests oversold. MACD shows the relationship between two moving averages and helps identify trend changes. Bollinger Bands measure volatility — when bands narrow, a big move may be coming.
MA Crossover Signal
Support, Resistance & Trendlines
Support is a price level where buying pressure consistently stops declines. Resistance is where selling pressure halts rallies. Drawing trendlines connecting these levels helps you identify entry and exit points. When price breaks through support or resistance with volume, it often signals a continuation of that move.
RSI Momentum Gauge
Timeframes & Context
Always check multiple timeframes before making a decision. A stock might look bullish on a 5-minute chart but bearish on the daily. Higher timeframes carry more weight — use the weekly chart for the big picture, the daily for trend direction, and intraday charts for precise entries.
Multiple Timeframes
Higher timeframes carry more weight
Key Takeaways
- 1
Candlestick patterns reveal market psychology and potential reversals.
- 2
Combine multiple indicators (RSI + MACD + MA) for stronger signals.
- 3
Always check higher timeframes for context before entering a trade.
- 4
No indicator is 100% accurate — always use stop losses.
Pro Tip
Combine RSI with Moving Average crossovers for stronger confirmation. When RSI shows overbought and the 50 MA crosses below the 200 MA, that's a high-confidence sell signal.