Learn how to use technical charts to understand market patterns and trends (1)
Overview
Our main goal with this guideline is to provide you with the
basic knowledge you need when exposed.
For technical recreations in the Forex market. We also provide you with knowledge about the most popular technical trading tools, which help you develop your investment decisions in the Forex Market. In technical analysis, we use existing data.
Already to predict the future. Before trading in the market,
it is important that all traders are equipped with knowledge.
Technical analysis can be placed under two categories:
Technical
Fundamental Analysis
Used to predict currency price levels in the market, by
analyzing political and economic data, scenarios,
In making a prediction of what may happen to the currency of
strength or weakness free of the true period of time.
Desire
Technical Analysis
Market trends are predicted here, using graphical analysis
to predict price fluctuations in currency markets.
Different.
In this guide, we address the principles of technical
analysis and some of the tools used in this analysis.
The basic assumptions
Technical analysis is based on 3 assumptions, namely:
1- We necessarily focus in technical analysis on
any causes of political instability, or causes of an economic crisis. so what
What matters to us is to observe how price levels change
based on political or economic events.
And how to behave prices compared to previous levels.
2- The rates of disbursement of the main aunts
are models that can be observed over the time period. Attempts Technical Analysis
Predicting these models is a way to help us set standards
for risk, or to find an opportunity to make a profit.
3- Technical analysis can be very subjective, as there is no general agreement on models, the number of waves, indicators of Selling saturation, or overbuying, and there is even agreement on trend lines. These tools must be used.
As a guideline or one of several means that can be used, damning
the trader to make his decision.
The Importance of Artistic Analysis
The majority of Forex traders currently rely on technical
analysis and political analysis and use these two types.
In the development of their own trading strategies.
Technical analysis outperforms fundamental analysis in its usability.
In different sectors of the market, and in aunts at the same time. While the basic analysis requires comprehensive details And complete the political and economic scenarios of a specific state. Traders, therefore, find it difficult to gather information. And knowledge about more than one country at the same time.
The enthusiasm of similar traders may disappear due to the complexity of technical analysis.
However, a successful trader understands the strategic need Trading and technical analysis have proven to be reliable tools to predict price movements in Forex, thus contributing To the formation of a trading strategy that lasts for years. In any case, the Ilman must be 100% true, because there is a number of It is a factor that affects the price of a currency. Precisely for this reason, traders resort to mixing technical sweeteners. And the basics to help them form a trading strategy.
Accessibility
Brokerage firms must provide access to a variety of technical sweeteners. There is software that contributes to Preparing graphs, this software is free and professional in detail and requires a monthly subscription. characterized by These charts update in real time, and offer a number of options for the user to view price movements, And the different models it forms.
The Company may provide these graphs on its website, or provide the possibility of downloading such graphs as part of the Trading software that it provides to you.
Before entering live Forex trading, it is wise to
familiarize yourself with market trends, by analyzing price changes, and price
levels using period-long charts. You also have to write down moments about the
fluctuations you see, and luck.
Whether there is any model that is formed. You can carry out these things by resorting to training accounts, provided by the company Brokerage for the new trader, to experience trading without the use of real money.
Using training accounts you will be able to:
Identify charts of the Forex market and market
trends.
You get used to using trading software, which
is used by your brokerage firm.
Common chart types
Charts provide us with details of market price fluctuations free of a specific period of time. That duration ranges from Time from one minute to a few years.
Prices can be drawn in the form of simple lines, strips, or candles. Japanese.
Line charts
Line charts provide us with a complete picture of price fluctuations free of a specified period of time. Despite the lack of this type For the details provided by Japanese bar charts or candlesticks, this type is simple, easy to read, and determines the direction in them. The drawing is a simple line that connects the price of dumping of the market, at the price of the following closing him.
Next, we review an example of a line graph, where you can see
the price on the X-axis and the time on the axis.
Bar charts
Bar charts provide you with details that exceed the details of line graphs. The length of the bar expresses the price difference (Move), free of a specific period of time. If there is a big difference between the high and low prices free of that period Timeline, the length of the bar will express this. We express the opening price in the left column, while we the closing price we express In the right column.
With this, you can immediately see the direction of the price action (either high or low) and also recognize the Pictures of these charts' prices: opening, rising, low, the amount of price movement is free for a specific period of time.
Pronounced like it is commonly called the OHLC graphs (which is an abbreviation for the initials of and cancel for a specific currency. And the prices expressed by the drawing In the example shown below we see the price represented in the form of a column.