Those who trade in forex must have an idea about Technical Analysis. Many traders in forex lose much more than they actually profit from the forex market. The basic reason behind it is the lack of knowledge about the Forex Technical Analysis. Technical analysis is the tool by which you can predict the future price movement of a currency you are trading in the forex based on the past data which are stored and well compiled.
Like the stock market, forex markets also pass through different stages at different periods of time. The price movement of the currencies in the past helps us in analyzing its future trends. There are many tools used by the traders like market trends, indicators and charts. There are also some other indicators which will be discussed below.
The most fundamental thing to understand about Forex Technical Analysis the markets is that the current price of any currency is the sum total of various factors like: supply, demand, fundamentals, economic conditions, market sentiments, political condition of a country being the major ones. So at any point of time all these factors need to be kept in mind while trading in forex.
Coming to market trends; as per all the data which has been complied since forex trading started in history, it shows that history repeats. In other worlds, the trends which were seen in the past are likely to occur in future too with not much difference.
Apart from them there are some other indicators like the moving average charts. They are considered to be the most basic indicators in forex markets. It identifies the trends in the market easily. Similar charts include moving average envelope, moving average convergence and divergence. These charts indicate the support, resistance levels. Forex Technical Analysis is important.
Then there are volume based indicators. It signifies the number of buyers and sellers involved in the market which decided the price movement to a greater extent than others. Now if a currency pair has strong price movement, it directly indicates the volume of the currency being traded.
Ranging indicators consists of Relative strength index which has oscillators ranging from 0 to 100.It shows whether a currency is overbought or oversold in the market. It actually measures the momentum of a counter. Forex Technical Analysis is key.
Fibonacci series is also used analyzing the future price of a counter. Fibonacci studies are done and they are converted to three important percentage levels: 38.2%, 50% and 61.8%. And with the help of this, we can very well make out the future trend in a given currency.
So in short there are many technical analysis tools and techniques. And each pattern and tool has its own importance in the market. So we should better learn them and keep them in mind while trading so that we can land up making profits rather losing money in the markets.
Forex Technical Analysis can also be received at
http://www.WatchTheTrend.com
| Trend Analysis for FREE can be received at http://www.WatchTheTrend.com. Steve Hoven is a trader and reviewer of trading products. |
No comments:
Post a Comment