Tag Archives: Technical

Market Analysis

Forex Fundamental Analysis and Forex Technical Analysis

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There are two major methods used to analyze and forecast the behavior of the Forex market – Technical (chart) analysis and Fundamental analysis.

Forex Fundamental analysis is a type of market analysis which involves studying of the economic situation of countries to trade currencies more effectively. Most FOREX traders rely on analysis to make plan their trading strategy. The other common form of analysis is technical analysis.

Both are distinct in their own ways, but on the other hand both are considered useful forecast tools for any Forex trader. They work towards the same goal – in predicting price or movement of currency in the forex market.

In technical (chart) analysis trader studies the effect while the fundamentalist studies are about the cause of market movement. The more successful forex traders have been seen to combine both types of analysis for results that are fine tuned further.

Forex technical (chart) analysis, forecasting price movements & future market trends are based in charts study of past market action. Technical analysis is more focused on what has actually happened in the market, instead of what should ideally happen. It takes into account the price of currency and the volume of trading, and then charts are developed from such a data which is used as its primary tool. One big advantage of technical analysis is that the forex trading analysts can follow many markets and are capable of trading currency simultaneously.

Chart analysis is built on some basic and yet crucial principles. (i) Market action discounts everything! (ii) Prices move in trends, and (iii) History repeats itself.

There are five categories in Forex chart analysis theory: (i) Indicators (oscillators, e.g.: Relative Strength Index (RSI) (ii) Number theory (Fibonacci numbers, Gann numbers) (iii) Waves (Elliott wave theory) (iv) Gaps (high-low, open-closing) (v) Trends (following moving average).

For an aspiring forex trader, learning technical analysis skill is a major factor and her/his success depends on his in-depth knowledge to a great extent. One should also study about the Forex technical analysis tools while studying about Forex technical analysis.

Market Analysis

How To Utilize Technical Analysis For Currency Trading

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Market analysis is very important in currency trading. Although no one can predict currency price movements, you can get valuable insights if you analyze the market.

There are two ways to analyze the Forex market. One is technical analysis and the other one is fundamental analysis. Both have advantages and disadvantages so you need to learn how to use these two analysis tools. However, if you are comfortable in crunching numbers and doing statistical predictions, technical currency trading analysis would be best for you.

The first thing you will need when performing technical analysis is a Forex chart. There are different types of charts available for every Forex trader. So be very sure that your Forex broker can provide different charting software to help you analyze the market.

If you are still a novice at the Forex market, you can use simple charts for your technical analysis. Line and bar charts could be very helpful for beginners especially if you just want to identify opening and closing prices trends.

However, you need to start educating yourself in using sophisticated Forex charts such as candlestick charting. Advanced charts can give you extremely valuable insights on the behavior of currency prices. You can also customize the time frames of your Forex charts to suit your trading styles.

When you analyze the market using Forex charts, be sure to strictly follow what the charts are telling you. If you go against the trends predicted by your Forex charts, then there are greater chances that you can lose big time on currency trading.

General Forex

Forex Technical Analysis – Importance Of Trend Lines And Resistance Levels In Forex Technical Analysis

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Forex Technical Analysis

Forex trend lines are important components used in chart analysis. Though the market goes in a direction which is present in zig zag lines, the placement of lower and upper portion of a zig zag allows us for plotting lines which connect the important lows also called troughs and the important highs also called peaks present in a corresponding zig zag by making use of software algorithms in a computer.

For drawing trendlines, 2 points will be necessary and 3rd will be confirmation of contact point. A trend chart must be drawn when using troughs with peaks. The trend line must be parallel and should be drawn in opposite side with trade channels. All the lines are the borders of the channel. These trendlines are very much essential for analysis of the current data of the forex market and they can provide the exact price variations which can help us to determine the right currency to invest. Forex Technical Analysis

The bottom and upper trade channel borders are called as resistance and support lines. Each of the peaks will represent the price levels that exceed the buying and selling pressure. They are also called resistance levels. The troughs represent different selling pressure levels and the buying pressure. The support levels and resistance level help in determining the correct price variation and time to sell the currencies. The consecutive resistance and support levels should exceed the other data in uptrend market. The reverse will be called as downtrend. Though smaller exceptions can be accepted, failures must be considered as the signals which warn for change in trends.

Trend significance will be varied with volume and time. The price if longer can bounce off the resistance and support levels, which is very important when the trend gets higher. The volume of forex trading is also equally significant, particularly when the resistance and support levels are critical. When level of currency bounces under certain volume, the trend significance can increase. The important of resistance and support level shall go beyond the actual functions.

If the levels get penetrated convincingly, there can be variation in opposite. A very good support level, which can be penetrated with heavy volume, shall become strong resistance level. But in other case, a very high resistance shall change into very high support once it gets penetrated. Generally the borders of trade channel which help in making decisions for saving or closing an already existing position must be based on certain rules. The first rule is that channel will be highly reliable if it exists for a longer time. When the channel is very reliable, the width will be high and steep channels will be less reliable. Support levels could be broken and are not dependent on volume level. Forex Technical Analysis

Market Analysis

Fundamentals Of Technical Analysis

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 Technical analysis has become one of the most popular science of trading. Even it is defined as not exact since that cannot guarantee future price trend, many traders are looking at it as it is a “trail to the gold”.

Now, when the computerization is developing to the higher levels, many technical analysts are forgetting about basic principles of analysis. Majority of retail and even professional traders and investors are jumping into the world of technical indicators in attempt to find or to develop a trading system or strategy which would make them rich “overnight” or allowed them do nothing and receive stable income flow. With hundreds of technical indicators many traders get lost in testing. It is difficult to call as analysis a process of selecting technical indicators and trying different indicators setting with purpose of finding a combination that works. Yet, the main part of traders are focused exactly on that by considering themselves as professional analysts and by forgetting that this is not analysis but a simple testing.

In 1930s through 1940s when the computers were not used in the stock market analysis, traders and technical analysts were more focused on the analysis of the stock market itself. They did not look for magic indicators that would tell when to buy and when to sell. They tried to understand underlying processes behind price movements. They dig though years of historical data in order to find out what was the moving force of price before and used this knowledge to define what moves price now and where it possibly could go in the future.

Technical analysis based on the testing various indicators setting still can deliver nice profit. However, without understanding the meaning of technical indicators and translating indicator’s movements into actions of traders, any trading system or strategy is doomed to failure. Already a hundred years ago, investors understood that price does not go down because Stochastics run over 80 and price does not go up because Stochastics dropped below 20. Price is moved by supply and demand which is created by the investors’ sentiment or by desire of mass to sell or buy.

Overall, there could be one advice only. Before going into a search of technical indicators, it would be correct to refer to the fundamentals of technical analysis. I particular, basic knowledge of Dow and Elliot Wave Theories could provide a novice trader with basic knowledge of cycles in the stock market as well as some understanding of trader’s psychology and how price movement could be explained by investors’ sentiment.

Forex Trading Articles

Forex Trading Technical Analysis – How to Target Triple Digit Gains in 30 Minutes a Day!

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Forex Trading Technical Analysis

If you want to make money at Forex trading, you should use technical analysis and the reasons are – its simple to understand, it works and its very time efficient. Let’s look at Forex technical analysis in more detail and how, you can get on the road to a triple digit income in around 30 minutes a day.

High odds chart patterns repeat, because human nature is constant and the emotions of greed and fear is reflected in the charts. If you look at any FX chart, you will see trends which can last for weeks or months and your aim is to lock into these trends and ride them for big profits. You are not interested in how or why prices are moving, you simply want to trade the reality of price change as it unfold on a Forex chart and make money from the trends!

The best Forex trading strategies are simple and focus on catching long term trends which can make big gains when you have leverage on your side. If you make a strategy to complex, it will have to many elements to break – so keep it simple and don’t work harder than you need too. Forex Trading Technical Analysis

You can learn all about Forex technical analysis and how to build a Forex trading strategy which can make big gains for free online or you can buy a Forex trading course which can teach you proven strategies and tools you can use.

Buying a course is a good option because, you get ready made strategies you can use which cuts your learning curve and as the best FX courses normally come with a risk free guarantee of, satisfaction or your money back, many traders use a course to learn the basics.

Whichever way you choose to learn Forex charting, if you have a desire to succeed and the motivation to learn, there is nothing to stop you achieving a triple digit income in around 30 minutes a day, in the world’s most exciting and rewarding business – Global Forex trading. Forex Trading Technical Analysis