Understanding Technical Analysis
With technical analysis, you will find it easier to recognize the character of price movements in the forex market. The more you master technical analysis, the more you will be able to recognize the extraordinary profit opportunities that are stored in price movements, whether when prices go up or down you can still profit.
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| Technical analysis in forex |
This is the reason for the importance of technical analysis for those of you who want to transact forex trading. Therefore, before you continue to learn the basics of forex technical analysis, it is recommended for you to have a forex demo account because later you will learn various practical things about forex trading.
Technical analysis can be very subjective. Two analysts looking at the same chart may have different views. This can happen because they have different styles.
However, it turns out that this subjectivity can be anticipated on the basis of solid technical analysis.
The important thing for you right now is to understand the basic principles of technical analysis first, so that later it will be easier to understand more complex and sophisticated technical analysis.
After you successfully complete this educational module, hopefully you will be better prepared to become a trader.
Now imagine that the forex market is a jungle that you want to explore. Then now, think about what you must have before exploring the jungle.
Maybe you need to think about preparing a map and compass, as well as maybe a weapon to deal with possible attacks by wild beasts. Don't forget a flashlight to help you see in the dark.
In trading, we can analogize technical analysis with the equipment you need to prepare before exploring the forest.
The bad news is that the market is inherently very difficult to predict due to the large volume and large number of market participants. The good news is that past reliable traders have found that technical analysis can help you predict price movements.
It may not be 100% accurate, but at least it can be close to 100%. Later, in further discussion, you will find out that even 60% accuracy can bring us quite a profit.
Want to know?
You just have to follow this educational module step by step. There are three things that underlie technical analysis. The three bases are:
#1. Market Action Discounts Everything
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| Market Action Discounts Everything, photo : Investing.com |
Thus, the thing you need to make a decision is what you can see from the price movement itself. You don't have to worry about news or rumours – for example, about So-and-so wanting to do this or that.
Just pay attention to the price action.
Calm down… calm down…
Later you will get to that topic.
Just follow this module to completion.
#2. Prices Move In Trend
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| Prices Move In Trend, UP, Flat/Sideways, Down |
The direction can be up, down, or just flat. By knowing market trends, you will be able to make the right decisions.
#3. History Repeats Itself
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| History Repeats Itself. Chart Patern |
Thus, the repetition of these patterns can be used to predict where the next price movement will go based on the "history" recorded when the same patterns appeared in the past.
Technical analysis can be very subjective. Two analysts looking at the same chart may have different views. This can happen because they have different styles. However, it turns out that this subjectivity can be anticipated on the basis of solid technical analysis.
The important thing for you right now is to understand the basic principles of technical analysis first, so that later it will be easier to understand more complex and sophisticated technical analysis.
After you successfully complete this educational module, hopefully you will be better prepared to become a trader.
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