technical analysis takes a look at the markets past price movements to
determine where the numbers will go in the future. Most investors who
employ this type of analysis look mostly at price data, but sometimes
information such as volume and open interest in futures contracts are
also taken into consideration.
Technical analysis is almost always used on some level because price
charts provide a good visual representation of the price history of a
particular currency. At the very least, they can help you determine
ideal entry and exit points for a trade based on the historical data.
You can decide whether or not you’re buying at a fair price, selling at
the top of a cycle, or entering into a shaky market.
traders consider technical analysis to be of critical importance even
though they may also use fundamental analysis to support and confirm the
strategy suggested by technical analysis. Unlike fundamental analysis
technical analysis can be applied to many different currencies and
markets at the same time. Since fundamental analysis requires detailed
knowledge of the economic conditions of a certain country it is very
hard for any single trader to perform proper fundamental analysis on
more than a few countries.
Technical analysis is not an exact science. It's an art and takes
considerable experience. Not all studies work the same for every
instrument traded. One study may give excellent buy and sell signals
while another may not work for you at all.
Between the technical analysis methodologies which can be used when
Before you start Forex trading it is a good idea to acquaint yourself
with market behavior by following Forex charts for a period of time and
by studying the movements and gaining an understanding of trends.