currencies prices move in a specific manner<\/strong>\u00a0in the respect that it has a trend that can be predicted. Thus, by looking back at historical data about these price movements, Technical analysts are able to discern patterns from the data.<\/p>\nThe main reason for these patterns is due to human psychology. Human beings tend to react in a specific manner when a certain event has occurred.<\/p>\n
Advantages over Fundamental Analysis<\/h2>\n Technical analysis also has an advantage over fundamental analysis because it can be used over a wide range\u00a0currency pairs\u00a0or market sectors at the same time. Fundamental analysis on the other hand requires a comprehensive overview study of a country political and social economic environment before one can draw any conclusion about the market.<\/p>\n
At times, traders can be overwhelmed by the shear volume of information that is required to be digested before they can arrive at any conclusions.<\/p>\n
To help them analyze the market data, technical analysts uses\u00a0a wide variety of technical charts<\/strong>\u00a0to help them make their forecast. Some of these charts are provided free and are incorporated in the trading platform provided by the\u00a0brokerage firm. More detailed charts are also available with third party providers for a monthly subscription.<\/p>\nThe data in these charts are also updated in real time and can be perused over several different time scales and zoom levels.<\/p>\n
One of the key tools used by technical analysts is the price chart.<\/p>\n
These charts provide\u00a0a visual representation of price fluctuations<\/strong>\u00a0over a specified time which can range from a minute to over a few years depending on the technical analyst\u2019s requirement.<\/p>\nThe level of detail or information required will depend on the type of charts that is used by the technical analysts.<\/p>\n
The information can be displayed on a simple line chart or on a bar chart or\u00a0candlestick charts\u00a0that shows the price fluctuations in more detail.<\/p>\n
A Wide Range of Technical Indicators<\/h2>\n In addition to charts, there is also a host of other\u00a0technical indicators<\/strong>\u00a0at the disposal of the technical analysts. These include technical indicators like:<\/p>\n\nBollinger Bands<\/li>\n Exponential Moving Average (EMA)<\/li>\n Fibonacci Extension<\/li>\n Fibonacci Retracements<\/li>\n MACD<\/li>\n Parabolic SAR<\/li>\n Relative Strength Index (RSI)<\/li>\n Simple Moving Average (SMA)<\/li>\n Stochastics<\/li>\n<\/ul>\nAlthough technical analysis may initially seem to be overwhelmingly complex, it has been proven to be\u00a0one of the most reliable tools<\/strong>\u00a0that a Forex trader can use for predicting price fluctuations. Then again, it cannot be regarded as 100% accurate as there are a myriad of other factors that can affect the price of a currency.<\/p>\nThe best result that one can obtain through analysis of the market is by combining the observations from both fundamental and technical analysis together. In this manner, a Forex trader can have overall view of the market as well as a\u00a0microscopic look at a particular currency<\/strong>\u00a0before deciding on his trading strategy.<\/p>\n","protected":false},"excerpt":{"rendered":"Another method which Forex trader can adopt to help them forecast the fluctuation of currency prices is with\u00a0technical analysis. Unlike\u00a0fundamental analysis\u00a0that looks at macro economic factors to forecast price movement, Technical analysis depends on the analysis of market generated data to help traders forecast price fluctuations. It also ignores the analysis of the macro economic […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":1187,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"templates\/sidebar-right.php","meta":{"footnotes":""},"yoast_head":"\n
Forex Technical Analysis - Online trading platforms<\/title>\n \n \n \n \n \n \n \n \n \n \n \n \n\t \n