Technical Analysis is one of the most popular ways to analyze market trends. Is basically the analysis of price and past patterns to try to predict and anticipate future movements. In world forex analyze 3 different ways of analyzing any market, whether stocks, bonds or currencies in our case. These methods are:
Technical Analysis
Fundamental Analysis
Relational Analysis
Fundamental analysis focuses on the underlying causes that make prices fluctuate, such as news, events or other events that cause a currency to devalue or increase its value. The relational analysis could say that is a combination of both, but more focused on the fundamental. It is a special case and is discussed separately in other sections. Finally, technical analysis does is focus on market fluctuations by themselves, without taking into account events or news ..
It does not take an economist to be able to practice and master the technical analysis
The technical analyst at Forex is based on the fact that all the information of what happens on the market position is reflected in the current price of the currency you want to negotiate. So all you need to make trading decisions is to study the price action. The key point of this analysis is to understand that forex markets are predisposed to the trend and understand these trends in its early stages is the key to success with technical analysis.
The main tool here is the graphics that identify trends and patterns, find or expect changes or currency fluctuations that generate revenue, also used as important tools support lines and flow resistance.
The technical analysis strategies are based on mathematics, statistics and logic. Based on observation, this analysis does is determine, using the trends of the mass, the address may take the currency in the future. That is, take past events to predict future market reaction.
Advantages of Technical Analysis in Forex
- Is best followed by most operators.
- It does not require hours of study. making it an advantage for those who do not have time to devote hours to study the market.
- Generally works well for those who work for the currency market tends to develop strong trends.
- It can perform simultaneously tracking of multiple currencies, it is not so overwhelming as fundamental analysis, which must be specialized due to the massive amount of data you need to know to succeed.
- Knowing and mastering technical analysis can work with any other currency, because the tools are the same and the rules can easily be applied to any time frame or currency negotiable.
- It depends on events in the market to operate.
- Analysis is a versatile, useful for all kinds of currency and consumer goods, stocks, industry, etc.
- It does not take an economist to practice technical analysis is required only to identify the indicators.
Basic Principles of Technical Analysis in Forex
In this strategy there is technical analysis basics for transactions, they are:
- Support lines: An area of price where it is considered unlikely that the price to drop further this point. The knowledge we have of these lines is essential to a successful analysis.
- Lines of Resistance: It is the opposite to the support, ie a resistance level is a graph where prices stop their rise and fall, as seller's prices are more important than the buyer.
- Trends: A trend is when you take the average variable price of one currency for a specified time. This is useful to investors to observe and compare the tops of the lines or increase the price.
- Setbacks: This is when prices recede a little from the current trend before returning to its original direction, are movements against the trend, but they tend to back up a predictable rate as well. For example, are known decreases of 33%, 50% or 66%.
- Channels: This is when prices move in two parallel trends. The technical analysts use this so that when the price touch the trend and when minimum purchase buy high sell trend.
- Graphics: This is the most widely used in technical analysis. Can be used to represent the evolution of market prices and predict future prices. They are used mainly two types of graphics:
1. Bar Charts: These are the most common. In the vertical bar you can see the minimum price, maximum and closing price. You can join the bars on a daily, weekly or monthly depending on the taste of the analyst to see the evolution of the value of money. But if you want to analyze the closing price around, then simply use a linear graph that represents the daily value. The other element of the bar graph is the horizontal axis representing time and the price. For each unit of time we draw a vertical line in the minimum contribution begins and ends at the maximum rate. Next and last is the trading volume. This goes under the bar of the day and the daily trading volume. It is essential as it indicates the number of transactions that were performed for each price range.
2. Point and figure charts: They use systems of circles and crosses to determine support and resistance lines, plus other items. Shows the evolution of prices in figures. It ensures that changes in the prices above a set amount. Prices range in the vertical axis, the horizontal axis represents only the changes in trend. Upon reaching level accuracy, the contributions are marked with an x, and so on contributions is given with an x on the same vertical, provided they have the same trend and exceed the minimum, if they do it ignores the contribution of that days.
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Technical Analysis
Fundamental Analysis
Relational Analysis
Fundamental analysis focuses on the underlying causes that make prices fluctuate, such as news, events or other events that cause a currency to devalue or increase its value. The relational analysis could say that is a combination of both, but more focused on the fundamental. It is a special case and is discussed separately in other sections. Finally, technical analysis does is focus on market fluctuations by themselves, without taking into account events or news ..
It does not take an economist to be able to practice and master the technical analysis
The technical analyst at Forex is based on the fact that all the information of what happens on the market position is reflected in the current price of the currency you want to negotiate. So all you need to make trading decisions is to study the price action. The key point of this analysis is to understand that forex markets are predisposed to the trend and understand these trends in its early stages is the key to success with technical analysis.
The main tool here is the graphics that identify trends and patterns, find or expect changes or currency fluctuations that generate revenue, also used as important tools support lines and flow resistance.
The technical analysis strategies are based on mathematics, statistics and logic. Based on observation, this analysis does is determine, using the trends of the mass, the address may take the currency in the future. That is, take past events to predict future market reaction.
Advantages of Technical Analysis in Forex
- Is best followed by most operators.
- It does not require hours of study. making it an advantage for those who do not have time to devote hours to study the market.
- Generally works well for those who work for the currency market tends to develop strong trends.
- It can perform simultaneously tracking of multiple currencies, it is not so overwhelming as fundamental analysis, which must be specialized due to the massive amount of data you need to know to succeed.
- Knowing and mastering technical analysis can work with any other currency, because the tools are the same and the rules can easily be applied to any time frame or currency negotiable.
- It depends on events in the market to operate.
- Analysis is a versatile, useful for all kinds of currency and consumer goods, stocks, industry, etc.
- It does not take an economist to practice technical analysis is required only to identify the indicators.
Basic Principles of Technical Analysis in Forex
In this strategy there is technical analysis basics for transactions, they are:
- Support lines: An area of price where it is considered unlikely that the price to drop further this point. The knowledge we have of these lines is essential to a successful analysis.
- Lines of Resistance: It is the opposite to the support, ie a resistance level is a graph where prices stop their rise and fall, as seller's prices are more important than the buyer.
- Trends: A trend is when you take the average variable price of one currency for a specified time. This is useful to investors to observe and compare the tops of the lines or increase the price.
- Setbacks: This is when prices recede a little from the current trend before returning to its original direction, are movements against the trend, but they tend to back up a predictable rate as well. For example, are known decreases of 33%, 50% or 66%.
- Channels: This is when prices move in two parallel trends. The technical analysts use this so that when the price touch the trend and when minimum purchase buy high sell trend.
- Graphics: This is the most widely used in technical analysis. Can be used to represent the evolution of market prices and predict future prices. They are used mainly two types of graphics:
1. Bar Charts: These are the most common. In the vertical bar you can see the minimum price, maximum and closing price. You can join the bars on a daily, weekly or monthly depending on the taste of the analyst to see the evolution of the value of money. But if you want to analyze the closing price around, then simply use a linear graph that represents the daily value. The other element of the bar graph is the horizontal axis representing time and the price. For each unit of time we draw a vertical line in the minimum contribution begins and ends at the maximum rate. Next and last is the trading volume. This goes under the bar of the day and the daily trading volume. It is essential as it indicates the number of transactions that were performed for each price range.
2. Point and figure charts: They use systems of circles and crosses to determine support and resistance lines, plus other items. Shows the evolution of prices in figures. It ensures that changes in the prices above a set amount. Prices range in the vertical axis, the horizontal axis represents only the changes in trend. Upon reaching level accuracy, the contributions are marked with an x, and so on contributions is given with an x on the same vertical, provided they have the same trend and exceed the minimum, if they do it ignores the contribution of that days.
related posts
- free forex indicator download
- ichimoku indicator
- macd and stochastic
- macd stochastic
- scalping trade
Forex is simple follow the trend and you will rich.
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