Candlestick Trading Blog
July 7, 2009
Forex Technical Analysis
| What is forex technical analysis? There is a large amount of information available on forex technical analysis and there is a very large amount of data that can be used to predict future price activity since the forex market is open for 24 per day. Technical analysis is used in other markets as well such as stocks and commodities and the interpretation is the same across assets. In today's article however, we will focus on why technical analysis is so popular in the forex market. Trends – the goal of forex traders is to determine whether or not a currency pair will trend in a specific direction, or if it is going to go sideways. Forex technical analysis requires a common method that draws trend lines to connect historical levels that prevented a rate from heading higher or lower. These levels are referred to as support and resistance levels and they are used by many forex traders to determine whether or not a trend will continue. Rate Consistency – when forex trading rarely are there inconsistencies between the different foreign currency pairs and if there are inconsistencies they typically last only seconds. These currency pairs are monitored by advanced computer systems as well for the larger players that manage hedge funds, and the very large banks that have these programs. Forex technical analysis takes into account all factors that influence these currency rates such as social, psychological, economic, and political factors. These have already been factored into the currency exchange rate and that is why many investors prefer this type of market analysis. Common Technical Indicators – there are numerous technical indicators used along with support and resistance levels including Fibonacci indicators, candlestick chart formations, the moving average, and stochastics. These indicators assist the trader with predicting the future direction of the exchange rates and there are many more indicators in addition to those listed above. Forex investors must also learn how to read stock charts as well in order to learn how to apply these technical indicators to their trading. When studying the FX market, there are major currency pairs that show the greatest characteristics of trends. These currency pairs include the EUR/USD (Euro/dollar), the USD/JPY (dollar, Japanese yen), USD/CHF (dollar, Swiss franc), and the GBP/USD (British pound/dollar). There is a lot more to learn about when studying forex technical analysis. Just ensure that you spend the large amount of time necessary to learn about the forex market, the different types of forex trading strategies as well as the different currency pairs available for trading. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
|
 |
|
 |
|
 |
|
 |
------------------------------------------------------------------- -
0 Comments:
Post a Comment
<< Blog Home