Today,
technical analysis is the most popular method for predicting the price
movements of world currencies in Forex - it is used by almost all
participants in the global market. Technical
analysis gives traders the ability to pretty accurately predict the
value of a currency, using only historical data on its price movement,
because only the statistics available to all participants of Forex in
real time. All these statistics through a variety of mathematical calculations
are converted to the currency price charts, traders are studying and
implementing the so-needed technical analysis.
I propose today to consider three key postulate underlying this method of forecasting price movement on Forex.
Postulate №1 - Forex market allows for everything!
With 100% certainty I say that this is the postulate of the rule, which gives us a unique opportunity to understand you all the basics of technical analysis. Thanks to him every trader with Forex must clearly realize that all external factors affecting the exchange rate (political, economic, psychological) is initially recorded in the value of currency, so there is no urgent need to engage in their analysis. Simply put, we get the following picture - using in their daily work in the Forex technical analysis, the trader is not necessarily used for the analysis of the market situation the fundamental method of predicting the value of the currency.
Proponents say the basics of technical analysis - Forex happened if
some historical exchange rates (albeit small), then all of the factors
that caused this swing, already taken into account, so the trader they
are of no interest.
Thus, the Forex, there are people who will never use in their professional work of fundamental analysis, considering that it fails to receive the income. For other traders using the same external factors that affect the demand and supply of currency, its actions have influence on its price.However, I must say that this statement has a large number of opponents, which lead their arguments in favor of that, along with the technical analysis should be applied and fundamental. Firstly, all Forex participants do not have the opportunity to receive at the same time all the fundamental factors affecting the exchange rate, so their synchronous actions, they can not adjust the value of the currency. Secondly, if we take into account the fact that «Forex market allows for everything", then there should not exist any external factors that are not yet included in the price of the currency. At the same time, practice shows that there is a huge number of examples, when some news gave rise to a price movement on Forex, which had no preconditions on the part of the technical analysis.
Postulate №2 - the Forex prices move with the trend!
According to this postulate, price dynamics in the Forex subject to certain trends, but does not occur randomly - thus traders have a good opportunity to use technical analysis. On this basis, the main concept, which operate "money changers", applying the basics of technical analysis, a "trend" or "trend" - the directed movement of currency prices on Forex.
Therefore, a key objective of all participants Forex is the correct definition of the trend of price movement (both current and future). This is to ensure that the trader just concluded a bargain or just shut it received, so your income.
Basics of technical analysis tell us about the three main trends:
- bullish trend (bullish trend) - upward price dynamics;
- bearish trend (bearish trend) - the falling price dynamics;
- flat (flat) - the price dynamics in the Forex market, which has virtually no some pronounced changes;
Postulate №3 - history repeats itself in the Forex!
This postulate suggests that over time, the psychological behavior of the Forex participants almost unchanged. So, at any point in time traders in similar situations behave in almost the same scenario, so that in the future, you can earn income on the same model that worked in the past. The main instruments of people using technical analysis are specific indicators derived from a wide variety of mathematical calculations made on the basis of historical performance currency prices. Analyzing such technical indicators Forex each participant can understand the current market situation and to predict the future behavior of currency prices. And on the basis of this analysis to make the right trading decisions. At the same time every currency trader, who in his work is based on the basics of technical analysis should be clearly understood that any trading signal coming from the technical indicator, in the first place is a recommendation. So that the final decision on opening (closing) a bargain and should be taken on the basis of signals received from the other instruments of the Forex market analysis methods - only in this case, the accuracy of trading decisions will be the highest.
The main advantage of technical analysis is that a trader can use it successfully with the short-term trading, in contrast, for example, from the same fundamental method, which is mostly effective in long-term trading in the Forex market.
However, despite the advantages of technical analysis, some new traders are afraid to use it at the beginning of his career on Forex, because, in their opinion, this method is too complicated. But in the end they all come sooner or later to ensure that the use of this type of analysis, because without it is very difficult (almost impossible) to achieve serious success in the Forex market.
According to this postulate, price dynamics in the Forex subject to certain trends, but does not occur randomly - thus traders have a good opportunity to use technical analysis. On this basis, the main concept, which operate "money changers", applying the basics of technical analysis, a "trend" or "trend" - the directed movement of currency prices on Forex.
Therefore, a key objective of all participants Forex is the correct definition of the trend of price movement (both current and future). This is to ensure that the trader just concluded a bargain or just shut it received, so your income.
Basics of technical analysis tell us about the three main trends:
- bullish trend (bullish trend) - upward price dynamics;
- bearish trend (bearish trend) - the falling price dynamics;
- flat (flat) - the price dynamics in the Forex market, which has virtually no some pronounced changes;
Postulate №3 - history repeats itself in the Forex!
This postulate suggests that over time, the psychological behavior of the Forex participants almost unchanged. So, at any point in time traders in similar situations behave in almost the same scenario, so that in the future, you can earn income on the same model that worked in the past. The main instruments of people using technical analysis are specific indicators derived from a wide variety of mathematical calculations made on the basis of historical performance currency prices. Analyzing such technical indicators Forex each participant can understand the current market situation and to predict the future behavior of currency prices. And on the basis of this analysis to make the right trading decisions. At the same time every currency trader, who in his work is based on the basics of technical analysis should be clearly understood that any trading signal coming from the technical indicator, in the first place is a recommendation. So that the final decision on opening (closing) a bargain and should be taken on the basis of signals received from the other instruments of the Forex market analysis methods - only in this case, the accuracy of trading decisions will be the highest.
The main advantage of technical analysis is that a trader can use it successfully with the short-term trading, in contrast, for example, from the same fundamental method, which is mostly effective in long-term trading in the Forex market.
However, despite the advantages of technical analysis, some new traders are afraid to use it at the beginning of his career on Forex, because, in their opinion, this method is too complicated. But in the end they all come sooner or later to ensure that the use of this type of analysis, because without it is very difficult (almost impossible) to achieve serious success in the Forex market.
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