Technical Analysis in Forex Trading

Posted on February 2, 2008
Filed Under Forex Education |

In Forex Trading, technical analysis is the study of market action, mainly through the use of charts and indicators to forecast the future movement of a currency.

There are a few principles that a technical analyst applies. The price is a compressive reflection of all market forces.

To a technical analyst, regardless of what the fundamentalist are saying, the price you see is the price you get. Price moves in trend – up (bullish), down (bearish) and flat (sideway) until the trend is broken and a reversal takes place. The time duration of the trend may be long intermediate or short. The historical trend will repeat itself.

The tools of the technical analyst are indicators, chart pattern and system. Moving average, Bollinger band and Stochastic Oscillator are some of the indicators. Trend line, support and resistance are some examples of chart pattern.

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