Technical analysis of "Forex" (market). What is the summary technical analysis "Forex"

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Everything that happens in the world in the political and economic sphere will inevitably affect the foreign exchange market. By including an external factor in their forecasts, a trader has a much higher probability of a correct forecast.

However, we must understand that we are talking about the forecast, no more, no less. The market can behave according to a completely unpredictable scenario, and all the calculated probability - both logical and calculated using various special tools, will turn out to be wrong. Nevertheless, traders need to study the patterns of the market for successful Forex trading.

Technical analysis of the Forex market is quite multifaceted. Many tools are used in the form of indicators, programs and other things. Various types of evaluation are used, including candlestick, graphical, Forex summary technical analysis and others.

What is technical analysis

Forex technical analysis is the main way to study it and is to predict price movements,based on previous fluctuations. It is mainly used to track prices on currency and stock exchanges. You can track price fluctuations and calculate its probable rise or fall through the technical analysis of the Forex market. Books about Forex are quite popular, a huge number of articles have been written on this topic. And this means that interest in him does not fade away.

Forecasting is built on the analysis of price series in their time interval. Other statistical information is also used. The tasks of technical analysis include only consideration of the direction in which the price is moving, without taking into account the reasons for this phenomenon. The correct definition will help you choose a profitable position in any market, including Forex.

Axioms

Display price information

This refers to the information needed to analyze the price that is included in the auction. Based on the price behavior, a market forecast is built. Technical analysis does not require external factors, which makes it much easier to obtain.

Following price trends

This axiom means that in their movement prices have a certain regularity. Therefore, they are divided into rows for a certain period of time, during which they change in any one direction. Charts look undulating and consist of ups and downs peaks. Based on this, 3 main trends are distinguished: ascending (rising price), descending (falling price) and sideways (unchanging price).

History repeating

Each event in the history as a whole, and in the foreign exchange market inin particular, tends to be repeated, due to the fact that the parties involved have the same attitude towards it. Therefore, those who are familiar with the past can understand the development in the future. Thus, studying the situation on the market, you need to find the same one that has already been in the past, which will allow you to draw the right conclusions about further development.

Technical analysis tools

Estimating the information obtained after the technical analysis, the trader begins to build a forecast using various tools, which are described below.

Fibonacci levels

Levels consist of lines divided into parts called grids. Thanks to them, waves are tracked, and if you learn how to use it, you will see the most profitable places to enter and exit. One of the grids is called a correction grid, thanks to which the trader tries to calculate to what level the price will reach. Another grid is the target grid, through which the wave movement is calculated.

Forex technical analysis indicators

Bill Williams Trend Oscillators and Volumes

Indicators: zigzag, ADX, CCI, ATR, Alligator, Fractals, Ichimoku Kinko Hyo, Moving Average, Bollinger Bands, Parabolic SAR, Bears Power, Standard Deviation, Envelopes, Bulls Power, Bears Power, Relative Strength Index, Stochastic Oscillator, Relative Vigor Index, Williams Percent Range, MACD, Force Index, Momentum, Awesome Oscillator, DeMarker, On Balance Volume, Market Facilitation Index, Acceleration/Deceleration, Money Flow Index, GatorOscillator

However, using only indicators in practice, it is rarely possible to trade successfully. This is because they are simply unable to predict, but can only show the situation of the present moment.

Of course, you can use them in trading, you just need to clearly understand what they can and cannot do.

Therefore, the most effective tool will be a combination of all price movement forecasting methods.

Programs

To help the trader, special programs for Forex technical analysis are issued. When using them, you need to take care of constantly updated data for currency pairs. This data usually consists of periods that should be taken into account in order for the technical analysis of the Forex market to be successful.

Also, programs must support the indicators that the trader is going to watch.

Programs can calculate Fibonacci levels and draw up information and price charts. In addition, some of them are able to save chart templates and apply them if necessary; receive a timeline of exchange rate data; sign charts.

What is fundamental in technical analysis

All information is reflected in the price change in Forex. The basics of technical analysis come from price and trading volume over time. Based on the price behavior, forecasts of the market development in the future are built. No external factors are needed here. Therefore, the forecast is built quite quickly and with a high probability of accuracy.

Prices are movingaccording to certain trends. This means that the price is not random, but is subject to trends. Therefore, the price movement in time is divided into certain intervals, where it moves in some direction. That's why the charts are shaped like waves, which are made up of high peaks and lows.

Everything in the world repeats itself - both the history of mankind and the history of the Forex market are cyclical. Therefore, knowing about past situations, it is possible to predict future fluctuations with a high degree of probability. Forex technical analysis figures were developed just on the basis of this axiom. The first such method was "Japanese candles", which were first put into practice by rice traders.

Japanese candles

The history of the invention dates back to the seventeenth century. Charles Dow applied it to the market using basic principles. Another financier later developed their chart pattern.

A simple chart with changes that occur in the market, can be used both separately and in combination with a line chart. Thanks to its visibility, it quickly gained popularity among traders around the world. And since the nineties of the last century, it has been considered a universal method for demonstrating the position of the financial market.

Graphic analysis

There are many methods used in the foreign exchange market. The main one is graphical analysis, based on the construction of graphs that demonstrate price behavior when certainfigures. There are different types of figures: continuing - consisting in the assumption of movement in the same direction as in the figure; reversal, indicating a change in trend, and so on. This method is quite efficient and convenient, but not accurate.

Forex technical analysis patterns

With the help of figures, they make predictions about the market movement: continuation or reversal. In these respects, they differ. Figures can be either one or both types at once. And the trader needs to determine the type of Forex technical analysis figure in order to calculate the further price behavior.

When plotting a chart and determining the type of figure, one should not forget about the possibility of error. Therefore, traders who have been trading Forex for a long time use several indicators for fidelity and reliability.

The most plausible will be the signals of the figures, which are based on large periods of time. Although they are used in the short term.

With the correct definition of figures, the trader has more chances to foresee the situation in the financial market and time to prepare for them.

Most famous patterns: Triangle, Triple Bottom, Diamond, Wedge, Double Top, Triple Bottom, Triple Top, Flag, Double Bottom, Pennant, Saucer.

Summary technical analysis

Forex summary technical analysis is a mathematical calculation of the movement of the capital market, an assessment of statistical data on certain assets.

The data here are Forex quotes, which alsoincludes rates of money pairs and trading volumes.

The purpose of this analysis is to predict the change in the price of an asset over a certain period of time.

The application of this analysis will manifest itself in short trading positions, where traders will come true correct predictions. They have a wide variety of sophisticated mathematical tools at their disposal, most of which are so-called lagging indicators that are calculated from recent prices. Having learned how to correctly use these tools, it will not be difficult to make a forecast.

However, such ready-made solutions should be treated with caution, because, relying entirely on machine calculations, trading can become thoughtless. Without understanding the essence of the Forex market and using the proposed mechanisms automatically, it is unlikely that you will be able to consistently earn on Forex.

Technical analysis methods

The most difficult forecasting method is mathematical. It is based on different formulas and algebraic calculations. Based on this method, market indicators are built. There are two directions: flat and trend.

In the trend direction, the line crosses the entire chart according to the calculated formula. Depending on the level at which the time series of prices of this line is located, forecasts are made about how the foreign exchange market will be built. The main thing here is to find a formula in order to build a trend. Flat, or side trend, is to build a line that indirectly shows the proximity to extremesprice.

Both methods, depending on the scale, may resemble each other, and therefore the point from which the reasoning will be built is quite difficult to find.

Another method, called cyclic, is based on the theory of the same name. According to it, changes occur regularly in cycles, like day and night. According to this theory, even trading systems are built, for example, Forex trading robots that give advice to a trader to buy or, conversely, sell a currency.

Based on the above, you can get an idea of how to do Forex technical analysis. It helps to predict prices, providing a trader with income in the foreign exchange market.