What technical analysis in the Forex

Technical analysis looks at price data and trading volume to determine whether to continue in the future or not. Provided that the analysis is based solely on the price movement do technical analysis.

The principle of technical analysis is that markets are acting on trends and everything that influences the price behavior is expressed in the graph.

The analysis of the trend is absolutely essential to understand and operate successfully in the Forex market. A major advantage of this market is that you can win 

both the rise and fall, as buying a currency equivalent to the sale of its counterpart.

Technical analysis can detect many signs that the trend may continue or change, and locate critical areas in prices that may serve as reference for the operation.

the trend

Experience teaches us that markets move in trends, the investor must identify and detect factors that may suggest a change. A trend can last for years, months, days or even hours.

Technical analysis attempts to detect critical levels would likely change. Trend lines drawn generally give us support and resistance, target price zones and, in general, many useful technical references.

It is recommended to run along the trend, it is much easier to succeed in operation for the trend than against it. the upward trends that tend to be less steep downtrends.

Indicators and figures

The same figures are repeated again and again over time. The best known are the figures of "head and shoulders", "triangle", "boxes", "double top", "at least double" and "flag".

The indicators generally indicate an overbought or oversold level, we indicate the possible future trends and corrections. We followers of trend indicators indicators and leaders who try to anticipate a turn or a break in the trend (stochastics, RSI, CCI) (Average, MACD moving).

Experience shows that the mood of operators is repeated, a knowledge of the evolution of prices and market phases give us an idea of ​​future price developments.

Support and Resistance

The second most important in technical analysis (following the trend) is the concept of support and resistance. There are levels that remain constant over time and that, or are difficult to drill upward (resistance) or difficult to break (media). It is logical that investors, over a long period of time, agree that at some level the price is right or wrong, or that costs a certain price break to the upside.

Prices have "memory": investors are recalled and graphics can appreciate this phenomenon.

A break of support or resistance, it is still an important technical fact, prices are released barriers to go to the next critical level. Not always a breaking of a level we think is an important support or resistance, leading to a leakage of price. They sometimes produce false breakouts. It is possible that although scanning is a critical level, the currency does not attract the interest of investors.

Five basic operating rules based on technical analysis

1. Have a system and iron discipline. If you give up and tow you market psychology is very likely to fail. During a day you can change many times my mind and what looks like a good buy can become a disaster within hours. If you do not have references to operate and you give up hope, you are lost.

2. If you have set a level of respect stop. It is best to be faithful to a dynamic work and take a small loss than losing capital or discipline. If you do not receive the benefits you analyze why. The fundamental virtue is to always be fresh and ready to take an advantageous position. Avoid holding positions against you or have a position without technical references.

3. Try abstraerte of euphoria or despair. This is not an easy task, because often the target prices soar and prices rise sharply. Sometimes pessimism dominates the atmosphere; It is in these situations where you can do your best operations. The psychological environment is often a trap and it is important to know about it.

4. objectives of fixed prices. It is better to cancel an advantageous position at a reasonable price, I give up. Unless the position is taken in a primary market floor is better to be disciplined with price targets.

5. Tends to buy and sell resistance media. Many times, these levels are clear and many people can see them. An uptrend tends to return to the support area, that area often give buy signal but it seems that the market is deteriorating. And a fall after a fresh buy signal is a rebound after a new low is the output signal.