Learn the foundations of technical analysis — candlestick charts, support and resistance, trend identification, and key indicators like RSI, MACD, and EMA. A practical guide for on-chain traders.
Technical analysis (TA) is the study of historical price and volume data to forecast future price movements. Unlike fundamental analysis, which examines a project's underlying value, TA focuses entirely on what the chart is telling you.
All known information is reflected in the price. Charts encode the collective sentiment of every market participant.
Human psychology drives markets. Fear, greed, and herd behavior create recurring patterns across timeframes.
TA does not predict the future — it identifies setups where the odds favor one outcome over another.
Candlestick charts are the most widely used chart type in trading. Each candle represents price movement over a specific time period and encodes four data points.
| Component | Meaning |
|---|---|
| Open | The price at the start of the time period |
| Close | The price at the end of the time period |
| High | The highest price reached during the period |
| Low | The lowest price reached during the period |
| Body | The filled area between open and close — green if close > open, red if close < open |
| Wicks (Shadows) | Thin lines above/below the body showing the high and low extremes |
Support and resistance are price levels where buying or selling pressure has historically concentrated. They form the backbone of most trading strategies.
A price level where buying interest is strong enough to prevent the price from falling further. Think of it as a "floor." The more times a support level holds, the stronger it is.
A price level where selling pressure is strong enough to prevent the price from rising further. Think of it as a "ceiling." Broken resistance often becomes future support.
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The trend is the general direction of price movement. Trading with the trend is one of the highest-probability strategies in any market.
Higher highs and higher lows. Each pullback bottoms above the previous low, and each rally makes a new high. Favor long positions.
Lower highs and lower lows. Each rally fails below the previous high, and each drop makes a new low. Favor short positions.
Price oscillates between a defined support floor and resistance ceiling. Buy near support, sell near resistance, or wait for a breakout.
Indicators are mathematical calculations applied to price and volume data. They help quantify momentum, trend strength, and potential reversals.
Measures momentum on a 0–100 scale. Default period: 14.
Shows the relationship between two EMAs (typically 12 and 26 period).
A smoothed average that weights recent prices more heavily. Common periods: 20, 50, 200.
Technical analysis is most powerful when you combine multiple tools into a coherent workflow. Here's a practical framework:
Check the daily chart. Is price making higher highs (uptrend), lower lows (downtrend), or ranging? Trade in the direction of the trend.
Mark horizontal support and resistance levels where price has reversed multiple times. These are your trade zones.
Look for setups where multiple signals align — e.g., price touching support + RSI oversold + bullish candle pattern.
Define your entry, stop-loss, and take-profit before entering. Calculate your risk/reward ratio — aim for 2:1 or better.
Enter the trade and let your plan play out. Do not move your stop-loss further away. Consider partial exits at key levels.
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Risk Warning: Trading perpetual futures involves significant risk of loss. Only trade with capital you can afford to lose. Dexly is a non-custodial interface; you are responsible for your own funds and trading decisions.
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