Getting Started with Technical Analysis

Well, hello everyone. Welcome to Getting Started with Technical Analysis. This is our first class of 2026. We're going back to the top of the rotation. What I want to do today is an overview, and I want to show you how technical analysis can be used in placing trades, setting targets, and exits. And so in this introductory class, that's what we're going to focus on. going to look at a lot of charts. We're going to look at how trend, how swing targets, how Fibonacci's, how all these things can be used in the world of technical analysis to help us become more informed as traders and more successful as investors. And traders. At least that's the goal, right? So my name is Barbara Armstrong. I am a coach with Schwab and a senior manager.

I invite you to follow me there. We also have the privilege of having Mr. James Boyd in the chat with us today. And James posts a lot of great content on X as well at JamesBoydCS. So be there, be square. He posted something a few months ago. I went over and. Canadianized his yard because I am Canadian and, unfortunately, for James, he is not so. I thought it would make him feel better if he could look out his window and gaze upon dozens of Canadian flags. And can you believe that he gave those flags out to trick or treaters? So, you know, now there's, you know, four dozen or so happy households with a Canadian flag in them somewhere in the metro Salt Lake City area.

Okay, before we get into things, just remember that all the information we're discussing today is for general information purposes only. None of it to be construed as a recommendation on the part of Schwab or myself. If we discuss options, know that those carry a high level of risk and aren't suitable for all investors. And our focus, this is getting started with technical analysis, so is obviously technical analysis. But other approaches, including fundamental analysis, being aware of what's going on globally, what's going on politically within the world, all have a role to play. So to make a more well-rounded decision, you don't necessarily want to look only at technical analysis. We're going to use the paper money software application today for our example trades.

And this is a brilliant place to learn and to become familiar with the platform and your trading strategies. However, know that there are some nuances and differences between paper money and a live account. Okay, so we've designed this class to be taught in about a nine-week rotation, and sometimes at the end, and sometimes as we go along. will intersperse some additional topics. Things like Bollinger Bands, Fibonacci's, you know, which James said is his middle name, some might assume is James Fibonacci Boyd. I haven't seen his birth certificate, so I can neither confirm nor deny whether or not that is true, but that is a tool. That we use. Um, so you know, we'll intersperse some kind of bonus sessions throughout, and two weeks ago, I did one like the eight things I wish I had known when I started trading.

So if you haven't watched that, you may want to go back and catch that. So we're back to week one, introduction to technical analysis. Okay, so we're gonna look at kind of the what and the why of technical analysis, some of the basic principles and tenants, and then we're going to go over. Some charting basics. And I know here that we may have some people who are brand new to this. And if you are new, please feel free to type a greeting in the chat. But we also have a lot of who I affectionately call our usual suspects— so hello to Sandeep and JDL MI and Alpha and Josh and the rest of the gang. Thank you all for being here as we go through this.

Okay, so with technical analysis, we can either, you know, look at technical analysis, which is looking at the charts, and it's a study of price and volume to identify and project where the price of the stock might be going. So that's looking at the charts. The second thing is looking at fundamental analysis. So, kind of looking under the hood, if you will, with technical analysis, we're looking where the vehicle is going, you know, with fundamental analysis, we're propping the hood, we're putting it up on a hoist and looking at the undercarriage, you know, the financial statements. the balance sheet, the income statement, and we're looking for value or potential growth. And we're looking at a number of metrics like a price-earnings ratio. And several other things.

The focus in this class is on door number one or technical analysis. The reason we look at this is because price tends to move in trends. So bullish is uptrending, bearish is downtrending, and sideways— I like to say— is kind of going a whole lot of nowhere or trading in a range. So something that is range bound. So here we have an up let me just change this. uptrend. Stocks don't tend to go straight up. downtrend. And when it's trading within a range, it may not be perfect. But, you know, it's kind of going a whole lot of nowhere. And they say your trend is your friend until it ends, right? And then how do we determine when a trend is ending? And that's a really good question.

And that's something that we'll discuss at length in this class. But the market discounts everything. And the expectation is that the current price reflects all current collective market knowledge. And so that has a big impact on that price. And that history, while it may not repeat itself, they say it tends to rhyme. And why is that? Because humans are humans. And whether it was in the 1920s or the 1980s or today in 2025, human beings are still human beings and they tend to react similarly in similar situations. Yeah. Alfie is asking an interesting question, you know, how much technical analysis should be done before the market opens? Well, you can do a lot of technical analysis before the market opens so that you're prepared to react when the market does open.

And it just depends on what your routines are. Yeah. And, you know, and, you know, you, Alfie's brought up one of my favorite terms, you know, analysis paralysis. And, and I met people when I was a client or a student of this education. And they were still in the locked, the way I say it, they were still locked in the bathroom, practicing on paper money, getting ready to get ready to get ready. And at some point you just have to actually pull the trigger and place a trade. And, you know, I went to this four-day workshop one time, and we got into a trade and ended up out of it the next morning. And I was like, 'Well, once burnt, twice shy.' And it's like, no— if the technical setup is there, you don't second guess.

You know, if all of your other you know analysis is in place, you place the trade. You know, and James talks about this a lot in his classes. You know, and looking at lots of charts is a good idea to find things that are a good candidate for the way you want to trade. You know, so, but let's kind of go on here. So what are like, why do we do this? Like, and when I first found technical analysis, oh, my landlord, I was so excited. Because looking at the charts, it just seems so intuitive to me. Then I could see a trend. And, you know, next week, we're going to talk about support and resistance. And for some people, it's relatively intuitive. And for others, maybe it's not.

But this is a skill looking at the charts that you can develop. And, you know, one of the things is that it's flexible. And what do we mean by that is that it can be applied in any and all market conditions. So, whether the market is going up, down, or sideways, technical analysis can guide you. It can help show you what's going on. Yeah. And you know, it can be applied in any financial market. You know, and Riceburger is saying, but you still have to both have a plan and trade the plan. Oh, yeah, that goes without saying. Yeah. Okay, so, you know, and what's the risk? It is that we have a cognitive bias, you know, and my daughter has accused me of being sometimes unrealistically optimistic.

And that has nothing to do with the markets, but you know, where other people will see a glass half empty, I always see it half full. You know, and so that's a cognitive bias. And you have to be aware if you have a cognitive bias, or maybe you really love a company. Maybe you really love, I don't know, Tesla or Apple or some company I've never heard of, and you tend to want it to do well. So you're reading things into the charts. That you wish were there when sometimes they might not be. You know, and, you know, so we have the risk of cognitive bias. We have the risk of slippage that the stock will move more than, you know, you were expecting. And I'll show you an example of that.

You know, and it, you know, trend application means, you know, hindsight is 2020 as they say. But we can learn from placing an example trade in paper money and seeing how that works out. And then going back and saying, like, did I have a plan? Did I follow my plan? When I go back, does that entry still make sense? You know, I teach trading a smaller account on Mondays and Fridays. And when we do our postmortems, as I like to call them on our trades, we often look at that. You know, and remember, we're going to talk a little bit about this. Um, in one of our examples, so, you know, it and so it's open to subjectivity. So, because it requires discretion to interpret it.

And so I may see one thing and it is possible. I'm not saying likely, but it's possible that James may see something else or see something in addition to what I've seen that would cause him to make a different trading decision than I might make. And that's just part of the art of technical analysis. Okay. Yeah, the psychological aspects of trading. Yeah, we, you know what, we talk a lot about that, both James and I do. Yeah. But it's. It's important. And that's why, you know, I say that hope and fear are four letter words in the world of trading. FOMO is another one. You know, and how do you prevent or keep yourself from trading based on fear and FOMO? You have a plan. You trade your plan.

You know when you're getting out of a trade before you place the trade, whether the trade goes for you or against you. And that will help you a lot, my friends. So, you know, what do we mean with discretionary versus non-discretionary? Well, discretionary is me reading the chart. What do I see? You know, I like to call it playing 'I spy with my little eye' and we're going to do a bit of that. Today. Actually, we're going to do quite a bit of that. You know, so when we're playing 'I spy with my little eye,' I may see one thing and you may see another. And this is why, when I started, you know, if the coach drew a line on the chart, I drew a line.

You know, because I wanted to make sure that I was reminding myself to see what they saw. you know, a human interpretation, you know, it's it, it's discretionary. Right. What do they say? Love is in the eye of the beholder. You know, and this can be difficult for others to replicate. If you're brand new to this, you know, there are coaches I've wanted to do what I call a Vulcan mind meld with, where I wish I could just kind of stick my fingers in their ear and do some kind of zap thing and all of a sudden have all the knowledge that they have. But unfortunately, I have not found a way to do that. So what I had to do was dedicate time to developing my own set of skills.

But watch who you're learning from, because practice doesn't necessarily make perfect. It makes permanent. And you don't want to make permanent, you know, a practice that isn't serving you, right? But what is non-discretionary? So we did an example trading plan based on green and red arrows last week. And a green arrow is not a discretionary thing. It is a computer-generated thing. So it doesn't require human interpretation. The system generates that. And this is a price crossing a 30-day moving average, or it could be a 50-day moving average, whatever you want. Either crossing above or below. So it's more methodical and it removes that pesky human bias. But you know, it doesn't adjust for nuances. Things which I call, like, a phantom green, where something—you know, we have. Uh-oh. You know, an uptrend. And something we say will generate a red arrow. If the stock has been, let's say, moving up. And then it comes down, comes up again. And then maybe it comes just— and it kisses it, but it doesn't close below. Some might say that's a phantom arrow. So, you know, it's a nuance. You know, and other trades should be able to replicate these non-discretionary markers. Okay.

So, you know, technical analysis can help us develop watch list criteria. It can help us define, you know, what we're going to trade. When we're going to trade it. You know, it can help us determine an entry signal. It can help us determine our position sizes, our exit signal. And then it can help us establish our routine. So all of these technical analysis components can be part of our trading plan. Okay, and when we start looking at the charts, the chart's a function of price and time. So we've got price along one side, we've got time along the bottom. and and often you know the colors we'll see on a chart might be red and green not because we're just coming out of Christmas but red is bearish green is bullish.

And often, you know, a trader will have volume at the bottom of a price graph. And why do we care about volume? Well, if you have a really big volume day, it's a sign of strength in that move, either bullish or bearish. Okay. So when we look at what happens within a day, and there is a study on ThinkOrSwim called ATR, average true range. So on every day, every stock that is traded has an opening price. And a closing price, and if you're using a bar chart, the opening price is on the left. The closing price is always on the right. And then there's a high for the day. And the low for the day. Now, if we're looking at average true range, it takes this whole piece.

Into account, which is the amount this is our range for the day. And if you're looking at average true range, then what they've done is added up that range over a number of days and divided it to say, 'Hey, within the last 14 days, which is the default when we look at ATR, this is how much the stock has moved from the high point to the low point during a day.' Now, this is considered bullish. Why? Well, because it opened lower and closed higher, so it went up during the day. With a bearish chart. It opened higher and closed lower. So it moved down throughout the day. And on your charts, these candles may be green. Or they may be white. These candles might be red. Okay, you can customize them to look however you like, but those are kind of standard industry defaults. Now.

Yeah, so when we do a bar chart, it's going to show us it's saying three items: the open, the close, and the range. Well, range is high and low. You know, and I've already talked about color, so I'd rather spend more time on the charts when we look at candlesticks and how a candlestick is created. All we've done is taken our bar chart, and we just kind of colored it in. So on a red day, on a down day, we've just taken that high. Whoops. May as well make it kind of match color wise. To the low and colored it in. And the same, you know, when it's an up day. We've just taken. the opening price, which is lower. and created our candle that way.

And then, you know, these bits we call the wick. Okay. We dedicate an entire class to candlesticks and I've actually created a series of short videos. I'll be recording the 12th one in this. later today or tomorrow. And so you can go and watch these little snippets of videos. They're like three to five minutes long on candlesticks if you're interested in more on that. And I'll show you where to access those. So here's our bullish candle and our bearish candle. You know, price closes higher than it opened, price closes lower than where it opened. And that's how those candles are constructed. Okay, so the open and the close, we can see this is a green candle. So on this chart, which is a standard candle chart. If it's red, it opened here and closed lower.

If it's green, it opened here and closed higher. Okay. And and you know, you can have all these filled in if you do candle trend. It looks a little different. And all I'll show you that when we go out to the charts. But that key information, and I don't want to like flog this to death. We've got open, high, low. and close, and I'll show you how we can use that in some of our trading plans. And then the range, which is you take the high and the low and you subtract them and that gives you your range for that day. Okay. And we can do this over different timeframes. And why are timeframes important? Well, if you're looking to do a trade that you expect days to weeks, you probably don't want to be looking at a five-year chart where every candle represents a week.

You know, you may want to look at a daily chart where you're looking at maybe three, six or nine months and every candle represents a day. Now, if you want to be a short-term trader, you may want to look at a one-hour chart where every candle represents one hour or 15 minutes, and you may only want to look at three days or five days. Okay. We've already talked about volume, and volume can help illustrate the strength of a move. So on a day like this day here back in November or this day here back in March, it shows that there was a lot of trading action that day. Um and so, when you have an update with high volume, it's generally to be considered to be a stronger bullish indication than if you had an update with really low volume and the same thing with a down day.

Down day, if you have high volume, it means lots of people are selling. And so, you know, then what are the odds that the next day the selling might continue? Some might interpret a day with a lot of volume in selling as a sign that that downtrend might continue or the uptrend might continue. So let's get out and look at some charts. Okay, so if we look at something like. And I want to show you some examples as we go. So here we have Bank of America. And if I look at this, it's a one-year chart. So we have a one-year chart here. If we want to see how much this stock has moved up in the last year, we can come here and say, 'Oops.' Show price as a percentage.

And then, when we come over here, we can see that you know this stock in the last 12 months is up 26 percent. And we can see that since April 10th, it has largely been uptrending. And does that mean every day has been an up day? It does not. But what it does mean is that the overall trend has been uptrending. And in fact, yesterday, this stock hit a new high. Now, if we want to look at candle versus candle trend and why some traders might be interested in having their chart show candle trend instead of candle. Let me just show you. An example.

So, if we come in here, to appearance, I have made my chart candle trend. And when you look at this example, This. Day, we went from a close here. To an open here, but the reason that this is dark green is because it opened here and closed lower. So when you have something candle trend. What it is telling me when I look at the candles is that: This day the stock opened here, and closed here, so this was the open, and this was the close. So bullish day, right? Right. Here it opened high. Closed lower, but still closed way above the previous day. And this is just a personal preference because I find it really annoying when something has gapped up by 10% and then it's showing a red arrow on the chart.

But that's just me, so I use candle trend. Now this candle, so let's look at: this is the bullish side of the block. Let's look at the bearish side. So this day, this stock. Opened here. Closed here, so bearish day and it, you know, closed lower than the previous day. Okay. Here. We opened here. We closed higher. But we still closed below the low of the previous day. So you'll notice that this candle, even though it closed higher than where it opened, it's outlined in red because it was still ultimately a bearish day, but it tried to cover. Sometimes, when we get something like this close to a support level, it's an indication that maybe this pullback is now complete, and you know, according to this chart, it did start to go up.

Okay, so. Let me just. Uh-uh. Rid of that. Now, when we... Use candle, you'll see this green would be a red. And this candle, which had a red outline under candle trend, has a green outline. Because it's a considered an up day even though it closed lower than the previous day and so this is just a matter of personal preference but this is you know one of those things that you you have a choice on. And so if you're wondering if my chart sometimes looks a little different or my candles look a little different, if you don't use candle trend, that would be why. Okay, so let's come and look at. AU. So, AU. We placed a trade in our trading—on a smaller account— on Friday.

And we said, well, this stock has been uptrending. You know, in the last year, it's up 293%. So to say it's uptrending is a bit of an understatement. But we looked at this and we said: 'Hey, if we wanted to just make a little money, you know, be small, nimble and quick, get in, make a little money and get out. Could we use that range of an average candle day? And what we did is we came to our studies, edited studies, and we typed. in ATR or average to range, which if you want the definition, you can just click on this little question mark and it will go through how they calculate it between the current high and the current low over the last 14 days.

So I'm not going to read it all here. But if we add that to our chart. So what we did is we said, 'If this goes up by the amount the stock moves in an average day, which was Thank you very much. When we put that trade on, yes, actually, we put that trade on on yesterday, $355. If it goes up $355 above today's high, get us out, and that made our target, $9381. And so it came up to $93. 58. And so when it was almost at $93. 58, I said, 'You know what? Close enough. You know, we're within 25 cents of our target. So we're going to take it.' So this is 1 of the ways we use technical analysis in.

That class to say, here's a stock that's been uptrending. It's bounced off a support level. We're going to use this average candlestick range to help us determine a target. Okay, so that was one. Let's go over to Micron. So Micron, this was Friday. And again, here's a stock, you know, up. Well, if we go to a year. Up. 200 and. you know, 40% in the last year. So another like extraordinary stock that has moved extraordinarily. And what we saw on Friday was a bit of a bull flag. And it was moving to the upside and you know we meet at 10 o'clock for that class so you know when we looked at this we said, okay, how could we determine a target. And so we're going to talk about this a little bit.

We're going to dedicate a whole class to this. But we came to our friend, Mr. Fibonacci, and we said, 'Well, if we consider this to be the bull flag here.' We went from here. Down to here. Where might we put a target? Well, we might put a target around that, you know. 337 level. The way I drew it on that day, it came out to 341. And so we said, 'Well, let's make our target just a little bit below that that fib number,' because sometimes it'll come really close and not quite hit it. So here's a way we use technical analysis to identify first a bull flag. And the bull flag. You know which we're going to spend a whole class talking about bull flags also.

Where we said it came up and then came back for a couple of days and we had a move where we call this a hold. For a to hold a trade above the high of the low day. So that gave us an entry. You know, which technical analysis can do. And then. So it was identifying the bull flag and then using the Fibonacci's to help us determine a target. Okay, does that make sense? Okay. Yeah, if you guys have any questions, don't hesitate to ask. So that was Micron. How about CityBank? So here was another one where we use technical analysis. Now here's another stock. It's in the financial sector. The financial sector has been booming over the last. Last month, it's been one of the strongest sectors and we went through a period of consolidation here.

Remember when we said something can be downtrending, uptrending, or going a whole lot of nowhere. And, you know, we have seen. downtrend. uptrend. and then going a whole lot of nowhere. You know, so on one chart we've seen all three directions: downtrending, uptrending, and sideways, and then this uptrend has resumed. And so on Friday. We said, well, hey, this looks like, you know, bull flag, bull flag, bull flag. And here we have it trading— or, you know, that close above. of the high of the low and instead we could have used a fib target, but we said, 'Well, what if we're modest and we just put in a swing target and what's a swing target? A swing target is just the previous high. It's just saying, 'Hey.' Let's just be modest. And, you know, with a. So sorry, let me just hone in here. So when you have a bull flag, you have choices, right? Like we always have choices. So we could say, 'Well, I'm going to do a swing target, which is what we did or we could say, 'Here was the size of this flag— kind of went from here to here.' I'm just going to copy that. And then we could have also made our target up here.

So this could have been another target.

129, but we said, 'Hey.' If we can get a little win, we have earnings coming up, we'll take it. And so we were in this trade for a very short period of time. But how did we determine the entry? Based on technical analysis, the movement of the chart. And then how did we determine our target? Technical analysis based on the previous high swing target. Okay, so if we wanted to do a new trade, where might we look? Well, we might stay in this financial sector and say, 'We've already looked at that.' What if we looked at American Express? So here's another stock that has been certainly up trending over the last year. We had a little bit of a pullback to the 30-day moving average and it's moving up.

And so, if you said, 'Well, what if I did my research and I haven't?' You know, I'm just making something up here, but what if you know, came out and you looked at the news on American Express. You know, so Barclays has adjusted their price target up to 367 from 355. Goldman Sachs adjusted their price target to 4. which is up here, they're obviously not all gonna be right. I'm looking at three different price targets and they range from 367, which is below where it's currently trading, to 400 to 420. Wells Fargo went to 425 but they're all moving their target up and so if you said well i'd like to just add you know and we'll go to I've just reset this account. If we said, you know, we could have a position.

up to 10%. So what if we wanted to add 100 shares to our account? So if we said, okay, and if you might say, no, I don't want to have any one position be more than, you know, 5% of my account value, then we'd say, okay. That sounds reasonable. I'm going to take $25 ,000. I'm going to divide that by the current price, call it 384. And we're going to buy 65 shares. And where are we going to put a stop? Well, we're going to say, hey, the recent low here. was $367 . 25 so if it goes three percent below that, it's not going in the right direction. 367 . 25 times 0 . 97. Is 356, so that's where we're going to put our stop.

And so, you know, how do we determine our stop based on. looking for a recent support level. which is technical analysis. Right. So we're going to come to the trade tab. We are going to right click. We're going to buy custom with a stop. How many shares are we going to buy? We're going to buy 65. No, 165, 65. And then we're going to turn our little firecracker into a paperclip. And then when we click anywhere else on these lines, it will even up. Quantities we're going to make our exit good till canceled and we're going to make that 356. Actually, 356 . 23. So how much are we risking per share? We're risking. 356 minus 384. And so if we go and do the math on that.

We're risking $27 a share. times 65. Oh, actually, let's call it 28. I'm going to round up. So we're risking $1 ,820. Now, is this a guarantee that we would get out at $356 . 23? It is not. And are we going to leave this stop forever on the system? If not acted upon or initiated, the stop losses will expire after either 60 or 90 days. So you want to check. And if you see a trade and there's no little exit chiclet beside it, you know, it may mean that. Your stop has expired, but part of your weekly routine— because we talked a bit about trading plans— might be to go in and say, 'Has there been a new?' a new support level established.

So let's say we had bought American Express here, or if we come back. You know, let's say we had bought it when it crossed the line here at around 319. Well, when it came back and crossed this line and bounced here. We might have moved the stop up from below here to below here, and then when it came up here and bounced again, then you know, we're continuing to move our stop up to reflect that new support level and the goal is to initially define our risk and then eventually to start trying to protect some of our profit. So I hope that you guys have found this helpful. That's a wrap for today. Lots of great stuff to come in the coming weeks. Here is my ask as we wrap things up.

One, if you haven't subscribed to this channel, there's a button in the bottom right corner. Please subscribe to the channel. You get access to the playlists and all of that. Stuff two, you're going to want to hit the like button. It helps move this up in the algorithms on YouTube so more people can find this content. Then, three, you're going to want to follow us in the land of X and just so that you can see, I want to bring over. When you go to... This is the trade management mini sessions and all these little mini snacks, if you will, on candlestick patterns. You can see this one's three minutes, two minutes, five. Minutes you know and we've got 11 in the series and and 12 you'll see out this week.

But um, you can see all of the playlists. You know, James teaches each and every day. So if you miss James' class this morning, you can go back and catch it in the archives. The Investing Master Series, if you want to do some binge learning on technical analysis, that's down here. Those mini sessions are in the, or those snacks, you know, are in both. Getting started with technical analysis, but they're grouped together under the mini sessions. So you know, you can do some binge learning on technical analysis. So guys, thank you for joining me. James, thanks for your help in the chat, and thanks to the people behind the scenes for helping me bring this class to life. I appreciate you being with me. We will see you in a webcast coming up soon. Up next, let me just see. Swing trading, I believe. On Tuesday. It's Swing Trading with Mike Fairbourn. So stick around. Take care, everyone. Bye for now.