The most important part of trading success is Risk Management. Welle’s Wilder Jr. (father of RSI, ADX & SAR Indicators) referred to it as “most important, the easiest to learn and hardest to do”. The reason for it is that at some point in the past you have made an unreasonably dangerous trade or investment and it worked out giving you the confidence that you can do it just one more time. However, people greatly underestimate the challenge of recovering from a substantial loss. If you end up losing 50% of your account on an over-leveraged trade running into a black swan event, you would need to now make 100% just to get back to even and the pressure on you to make this 100% will be greater than ever before.

If you do NOT understand how to read candlesticks, you should NOT be trading. Spend as much time as needed to familiarize yourself with their basics then review all the different types of candles that exist. You can also read more about their role in identifying Support & Resistance (topic 2). Additional PDF references are here, here & here. There is no dedicated Volume section in this tutorial other then Volume related Indicators and Oscillators (Topic 4). While I personally do not pay as much attention on volume as price, it should be something to always have in the back of your mind and keeping an eye on as you learn about ideal entries and exits.

This comes in many forms, but I like to simplify it to just 4 types: A. Prior Highs & Lows – Where prior points of interest create ideal breakout or reversal targets (Also see Pivot Points) B. Trend Lines & Channels – Where a straight line can be drawn connecting 3 highs or lows at different price points C. Moving Averages – There are always debates on Simple vs. Exponential (I prefer the Simple 50 & 200 as a reference) D. Fibonacci Retracements & Fans – These Golden Ratio levels act like magnates that can attract & repel price moves Understanding the important role of Support & Resistance is highly important for successful trading.

This comes in many forms, but I like to simplify it to just 4 types: A. Prior Highs & Lows – Where prior points of interest create ideal breakout or reversal targets (Also see Pivot Points) B. Trend Lines & Channels – Where a straight line can be drawn connecting 3 highs or lows at different price points C. Moving Averages – There are always debates on Simple vs. Exponential (I prefer the Simple 50 & 200 as a reference) D. Fibonacci Retracements & Fans – These Golden Ratio levels act like magnates that can attract & repel price moves Understanding the important role of Support & Resistance is highly important for successful trading.

Before we dive into individual trading indicators, we should discuss the different categories of indicators (must read). At the highest level they can be broken down into Overlays vs Oscillators. Overlays are indicators that are plotted directly on top of a price chart and hence use the same scale as price (though they could be Volume based). Oscillators on the other hand, are plotted above or below a price chart and have their own independent scales. Both Overlays and Oscillators come in Lagging, Leading or Coincident varieties which have their own advantages and disadvantages. (and here). Oscillators come in all kinds of types including being Centered where they fluctuate around a specific value (usually 0), Bounded where they have a maximum/minimum value that can be achieved, while others (like OBV) have neither of those properties (hence it should not really be called an Oscillator).