What is Technical Analysis & Why You Need it When Trading Forex

By Arman Logan

In this article, I would like to talk about the importance of doing technical analysis, if you are trading forex market. Read carefully everything below, if you want to know what technical analysis all about is.

The purpose of technical analysis is to predict future price movements of currencies by analyzing past market data.

Majority of forex traders regularly use technical analysis to see, which the profitable currency pair is and how to bid. Even people, who are just beginning to trade forex, need to have a look at the data, because otherwise it's useless to buy and sell something without knowing the market history.

According to Technical Analysis this is what happens in Forex Market:

1. All market fundamentals are reflected in price data and there is no need to study moods, differing opinions and other market fundamentals.

2. The history of data often and regularly repeats it self in particular patterns, which makes it fairly predictable. These patterns are called signals. The job of a person who is working on technical analysis is to examine the past signals in order to predict future price movements.

3. Prices move in trends. Technical analysts believe that it's possible to predict how the price will change in the future, because price fluctuations are not random, and there is a specific pattern for them.

How To Trade Forex

In order to trade forex successfully, and be able to predict how the price will move, you need to analyze charts, graphs, forex trends and other data to get some idea of what's going to happen.

Technical analysis greatly helps to eliminate the guesswork and be more accurate, when making decisions. All those graphs and charts might look complicated, when you look at them first time, but you will need to get used to all that stuff, because it's a vital thing, if you consider yourself a serious forex trader.

A professional forex trader, Marcus Leary makes a great living online trading forex. However, he doesn't analyze any complicated data, because he developed advanced forex software called Forex Autopilot, which does all the work for him and the best thing is that anyone can use the software, because it's really simple. You can learn more about Forex Autopilot by clicking here.