Technical analysis in forex learns about the effects of patterns of price movements that have occurred
In technical analysis, there are three basic principles used. This principle is based on current market movements, trend of price movements, and history of previous price movements. Okay, we’ll try to discuss these principles one by one.
1. The whole cause of price movement has been expressed in the pattern of price movements itself.
When market movements are visible, all economic supply and demand until the current political situation of a country will affect the market and become a consideration for traders. In predicting the direction of the market, Chartist is true focusing only on current price movement patterns and changes in technical indicators, not on what will happen due to certain news releases.
2. Prices always move to follow the trend with certain limits.
The tendency of price movements is another factor when using technical analysis. This means that there is a pattern in market behavior that becomes a big factor in the market. These patterns are usually repeated from time to time and can often be a consistent factor when predicting the market. An important objective of technical analysis is to determine the direction of future price movement trends, both in the short, medium and long term.
3. What is considered when doing an analysis is history.
Chartists believe that the pattern of price movements in the past will be repeated and could happen again today. There are certain patterns in the market and this is usually used as an indicator. There are several charts that are considered by forecasting the market using technical analysis. These graphs are graphs that include indicators, number theory, waves, gaps, and trends. The pattern of price movements can also be in the form of candlestick bar formations with various variations.
Other Theories That Underlie Principles of Technical Analysis
In addition to trends, chart patterns, and candlestick bar formations; the principle of technical analysis in forex is also based on several other things, namely:
- Mathematical Theories,
- Theory of Numbers,
- Wave theory,
Indeed, it will be quite complicated for those who are not yet experienced in the capital market business. Professional traders must understand the graphics and have the ability to analyze all the price movements in the financial market.
Believe it or not, almost issued an indicator that there is now the liquid results of the development of 3 carrying the basic Forex technical analysis above. For example, Moving averages and similar indicators were created to help traders analyze trends more easily. The Adviesraad, the calculation of Pivot points and Fibonacci Retracement was clearly applied to the Kokoro level of support and resistance. So for those of you who want to YG Forex technical analysis from the basics, you should first learn 3 carrying the above mentioned
Even if you prefer to use indicators, this understanding still has a repentant contribution to the progress of your Forex analysis. In fact, choosing the right indicator also requires expertise to recognize its various functions in technical analysis. So if you are a basic Forex technical analysis, then determining the best indicator is no longer a difficult thing.