[New Series: Zone Final Chapter Chapter 7] Understanding Technical Analysis from the Flow of Buy and Sell Orders ?✨

To you who are facing charts seriously today, even beyond the screen, diligently striving for your own and your family's future ☕️✨

In the previous Chapter 6, we talked about the market having the “masses” and the “big professional players,” and how their motives move prices. So, how are the “charts” and “indicators” we stare at every day on TradingView or MT4 connected to the movements of these human players?

In this Chapter 7, we will deeply yet clearly reveal the true nature of the weapon we rely on the most—the technical analysis. When you realize that the single line drawn on gold or FX charts is actually a crystallization of collective human psychology, the view of trading will look completely different!

We will explain it gently so you can read it smoothly even on a smartphone, so please relax and read on.

? Why do prices move? — The Ultimate Simple Rule

To deeply understand technical analysis, first let’s review the fundamental rules of price movement.

All price movements arise when the flow of buy orders and sell orders tilts in one direction. As long as the number of buy orders and sell orders is not equal, the price will fluctuate; if more buy orders exist, the price rises, and if more sell orders exist, the price falls.

And the force that produces the greatest tilt in this flow of orders comes from large speculators (professionals) and huge corporations. When they move, the chart always leaves some sort of “trace.”

?️ Candlesticks are records of human behavior

The price charts we casually look at, such as candlesticks, are actually visualizations of the collective actions within a specific time frame. As buy and sell orders get filled, their trades form the price rises or falls, turning what would be a totally chaotic flow into recognizable patterns.

Now, to give a daily-life example: when we watch children grow daily, we start to read their unique behavioral patterns, such as, “If you take away this toy, they’ll definitely cry and get angry,” or “If they get sleepy at this time, they’ll start fussing.” People’s behavior tends to repeat similarly under certain conditions, doesn’t it? ????

Technical analysis is exactly the same: using geometric price patterns and mathematical equations (indicators) to discover the repetition of price movements. Since human behavior repeats, the patterns that appear on charts are statistically likely to repeat as well.

? The true nature of math-based technical analysis

Not only chart shapes (like double tops or head and shoulders), but today we use very advanced mathematical tools to analyze the market.