Technical Analysis of the FOREX Market
29490
Finance > Currency Trading
Jun 20, 2007
harwich
Technical Analysis of the FOREX Market
In FOREX trading there are two common types of analysis that most traders utilize, they are fundamental and technical analysis. Fundamental analysis attempts to predict currency movement based off of political and economy indicators. Technical analysis uses historical economic information to predict changes in the FOREX market. This is the first of two articles that will explore technical analysis. Technical Analysis is based on the following assumptions: 1. Price movements are a result of combined market forces. Political events, economic conditions, seasonal fluctuations, supply and demand are all things that can effect currency prices. Technical analysts do not concern themselves with why the market moves, they are only interested in the movements themselves. 2. Currency prices on the FOREX market follow trends. Predictable consequences have been linked with many recognized market patterns. 3. Historical trends can be used to predict current price movements. Data on the FOREX market has been collected for the last 100 years, over that time certain patterns have become emergent. Human psychology and the way people react to certain circumstances are the basis of these patterns. Most 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 and political conditions of a certain country it is nearly impossible for any single trader to perform proper fundamental analysis on more than a few countries. For the beginning trader the complexities of technical analysis may seem overwhelming and they may even wonder if it is actually necessary. If you wish to be successful at FOREX trading you must have a strategy. Any strategy can work but technical analysis has been proven as a reliable and effective method of predicting market changes. Many forces can effect currency prices though so technical analysis is no guarantee, most successful traders utilize a combination of technical and fundamental analysis. Any quality online FOREX broker should be able to supply you with a large variety of online charts for technical analysis. You can purchase in-depth professional charts, there is usually a monthly fee involved in gaining access to this information. There is also free software available to help you with charting. Charts provide different snapshots of timeframes and usually can also have analytical overlays. These charts will provide a broad over view and can also be zoomed into the tick level. Good charts are updated in real time. These may be available on your brokers site or could be part of their software. You should learn the market and study trends before for a period of time before you begin actively trading. Most brokers will provide you with a practice account where you can place "paper trades". Paper trades are just practice trades where no real money is made or lost. They act just like a real trade though so you can see exactly how your trade would have turned out if you had placed it for real. This allows you to become familiar with your brokers system and software as well as learning about the market and how it moves without risking any money while you learn. The second part of this article will explore the various charts and technical indicators.
Ready to learn forex trading? Want to learn about FOREX Trading Signal. Learn our FOREX day trading system completely free.
send email to harwich
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
This is the first in a series aimed at helping people get started trading on the FOREX market. This first segment covers starting with the right attitude.
Category:
You won't need a hammer or saw, but you do need tools to be a successful trader. Read about some of the tools you should use to assist you in your trading.
Category:
A discussion of options and how they are used in the FOREX market.
Category:
Part of a series to help you find life insurance online. This segment deals with preparing to request a quote.
Category:
Everyone needs to exercise to remain healthy. Learn how a treadmill can make this easier and more pleasant.
Category:
Why would some one start smoking? Read for some insights into how people get started with this destructive habit.
Category:
Useful information on easing the transition to a toddler bed for your child.
Category:
An introduction to several types of credit cards. Aimed at helping people decide what type of card is best for them.
Category:
You have probably noticed that digital television signals are becoming more common. Learn the many advantages inherent in this change.
Category:
Learn to read FOREX quotes to help you be successful on the FOREX market.
Category:
There are many things you will need to do if you want to start trading on the FOREX market. Selecting the account type that fits your needs is one of the first.
Category:
Other links at Finance > Currency Trading
The word Forex comes from Foreign Exchange and it is a global market where you can deal with various currencies at different rates.
Category:
Japanese candlesticks offer a "mathematical expression of psychological market sentiment" to trader Gary Wagner, who utilizes these Eastern technical indicators in conjunction with Western tools to actively trade for himself.
Category:
Forex is the currency trading market which is the biggest and most quickly evolving markets in the world. Currently it has a daily turn over of of 2.5 trillion dollars which is actually one hundred times larger then the NASDAQ. Different markets are
Category:
Every minute more than 150 Million Dollars change hands in the electronic index futures markets like the e-mini S&P and e-mini NQ. You can win or lose thousands of dollars in a few minutes; the futures markets can make you rich in a few weeks or months or
Category:
Site Sponsor
Directory Statistics
Articles: 68252
Categories: 501
Yahoo Entertainment
