Welcome to Technical Price Analysis, the unit that reads the market's own footprints. Technical analysis studies price, volume, and open-interest action itself to forecast where and when a market is likely to move next. That is a different job from fundamental analysis, which studies supply, demand, and economics to explain why a market moves (the next unit's scope). This unit stays on the chart.
Exam Weight: Part 1 spans ~71% of the exam across Chapters 1-7 combined; the National Futures Association (NFA) does not publish per-unit weights.
Video Resources
What You'll Learn
In this unit, you'll cover:
- Charts: What technical analysis assumes about price, and the four chart types (bar, line, candlestick, and point-and-figure), including the one that ignores time entirely
- Trendlines: How an uptrend line is drawn under the lows and acts as support, how a downtrend line is drawn over the highs and acts as resistance, and why a decisive break warns of a reversal
- Support and Resistance Levels: The floor below the market and the ceiling above it, and the role reversal that flips a broken floor into a ceiling
- Congestion Areas: The sideways range where neither buyers nor sellers win, and why the eventual breakout matters
- Gaps: The empty space where no trading happened, and the three types (breakaway, runaway/measuring, and exhaustion) told apart by where they sit in the move
- Volume and Open Interest: The difference between contracts traded and contracts still outstanding, and how the two together confirm or cast doubt on a price trend
Why This Matters
Technical analysis questions on the Series 3 reward students who keep a handful of precise distinctions straight: which tick on a bar is the open versus the close, which trendline gives support versus resistance, and what a broken level becomes. Volume and open interest tie it together, since a healthy trend and a suspect one look identical on price alone until you read the participation behind them.
Let's start with the charts themselves.