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Technical analysis fundamentals covering chart patterns, trend analysis, and TA concepts applicable to crypto OHLCV data.

Technical Analysis Fundamentals

Technical analysis is the study of historical price and volume data to identify patterns and predict future market movements.

Dexorder scope: Only crypto OHLCV data is available. TradFi data (equities, forex, bonds, options, macro) and alternative data (news, sentiment, on-chain) are not supported. See ../pandas-ta-reference.md for the full catalog of built-in indicators, and ../indicators/indicator-development.md for creating custom indicators.

Key Concepts

Price Action

Raw price movement without indicators:

  • Support and resistance levels
  • Trend lines and channels
  • Chart patterns (head and shoulders, double tops, etc.)
  • Candlestick patterns

Trends

Markets move in trends:

  • Uptrend: Higher highs and higher lows
  • Downtrend: Lower highs and lower lows
  • Sideways: Range-bound consolidation
  • Trend strength measured by consistency

Volume

Trading volume confirms price movements:

  • High volume confirms trends
  • Low volume suggests weak moves
  • Volume precedes price
  • Divergences signal reversals

Common Indicators

Trend Indicators

  • Moving Averages: SMA, EMA, WMA
  • MACD: Trend and momentum
  • ADX: Trend strength
  • Parabolic SAR: Trend direction

Momentum Indicators

  • RSI: Overbought/oversold conditions (0-100)
  • Stochastic: Fast vs slow momentum
  • CCI: Cyclical trends
  • Williams %R: Momentum oscillator

Volatility Indicators

  • Bollinger Bands: Price envelope around MA
  • ATR: Average True Range for volatility
  • Keltner Channels: ATR-based bands
  • Donchian Channels: High/low breakouts

Volume Indicators

  • OBV: On Balance Volume
  • VWAP: Volume Weighted Average Price
  • Volume Profile: Price levels by volume
  • Chaikin Money Flow: Volume pressure

Timeframes

Different timeframes for different strategies:

  • Scalping: 1m, 5m charts
  • Day Trading: 5m, 15m, 1h charts
  • Swing Trading: 4h, 1D charts
  • Position Trading: 1D, 1W charts

Always analyze multiple timeframes for context.

Risk Management

Essential principles:

  • Position Sizing: Risk 1-2% per trade
  • Stop Losses: Define exit before entry
  • Risk/Reward: Minimum 1:2 ratio
  • Diversification: Multiple uncorrelated positions

Never trade without a plan and defined risk parameters.

See Also