Technical analysis of forex prices

In this section we will take a deeper look at the various tools employed by technical analysts in predicting the direction of the trend, and for deciding on entry or exit points. We will first study the main categories of forex technical analysis, and then examine some of the most popular indicators used in this type of analysis, in order to help you decide on the best tools for your approach.

Neither a great understanding of the markets, nor exceptional skills in mathematics is a necessity for being a successful technical analyst. Since the tools have been refined through decades of trial and error, we have all the principles laid out for us by the past wizards of this trade. Many scenarios have been examined, countless situations have been explored with technical tools, and what is more, with the backtesting capability of today’s software, the ways in which our technical schemes can be employed are practically limitless. With all this automation, the knowledge and experience that is readily available for students of technical analysis, all that is needed is patience and hard work.

Forex technical analysis

 

Useful Software for Technical Traders

Forex traders who base their trade plans on technical analysis often require support from specialized technical analysis software programs. Some more sophisticated forex technical analysis software packages also offer a number of different types of functionality to their users. Read more...

The Effective Use of Technical Indicators

Technical traders often compute and plot mathematical quantities based on market observables like price and volume in order to indicate the past or present state of the market. Read more...

Forex oscillators — the predictive value of divergence and convergence

Oscillators give the trader limit values which he can use to evaluate the price action. The currency price is a number, and its range is limitless (it can move between zero and infinity). Read more...

Foundations of Forex Technical Analysis

Traders new to forex might be mystified as to why technical analysis can provide such excellent market calls, perhaps even initially considering it another fortune telling hoax like reading tea leaves. Read more...

Multiple Time Frame Analysis

When trading forex using technical analysis, many traders will consult charts that cover several different time frames in order to refine their analysis.  Furthermore, many technical analysts provide different forecasts for a particular currency pair that depends on what time... Read more...

Essential Forex Chart Types

Price charts have been used by technical analysts operating in a variety of financial and commodity markets for many years. In the forex market, traders will typically plot the exchange rate of a particular currency pair as it evolves over time. Read more...

A few general principles on technical analysis

Technical analysis studies chart patterns, and it aims to identify trends, decide on entry/exit points and determine the psychological attitude of the market environment. Read more...

Forex Candlestick Charts

Forex candlestick charts make up one of the most useful tools for the forex trader and technical analyst. Candlestick charting has a rich history that predates the forex market considerably, having been invented in Japan in the 1700s. Read more...

Forex price action — reading the language of the market

Most of this text is fairly straightforward. The terms and descriptions that we use are often self-evident, and we hope that even someone with no experience of trading will be able to grasp the essence of the discussion with a... Read more...

Forex trend indicators

These indicators are used to gauge the strength and direction of a trend. As their name suggests, they are most useful in trending markets, and their usage in ranging markets is to be avoided because of the tendency to give... Read more...

The Perils of Forex Backtesting — how to evaluate a technical forex strategy

Trading involves numbers. We need to make a lot of calculations to analyze the price action and gain an understanding of market movements. While economic events usually follow a discernible pattern of cause and effect that may be evident even... Read more...

Forex Trend Breakout – Methods to Spot a Coming Breakout

Support and resistance is a well-known concept in forex and other types of investment. The concept arose from the observation that prices sometimes "test" a certain limit multiple times. Read more...

Fibonacci Retracements and Projections

Many forex traders have learned to use Fibonacci retracements and projections when trading. Nevertheless, not all of them realize that they are using an element of Elliott Wave Theory in the process of doing so. Read more...

Identifying Point and Figure Chart Patterns

Interest has recently resurfaced among technical analysts and forex traders in using a traditional form of price analysis that has been around since the 19th century in the form of Point and Figure charts. Read more...

Market Strength: How to Gauge the Power of a Market Movement

The basic profit in forex, as in any liquid, market-based investment, is knowledge. If you can accurately predict where the market is going and do so consistently, you'll be a very rich person. Read more...

Triple Exponential Moving Average: The TEMA Indicator

Triple Exponential Moving Average, or TEMA, is a type of exponential moving average developed by Patrick Mulloy in 1994. One of the common problems of trading with EMAs or oscillators has always been the inevitable issue of lag encountered in... Read more...

Forex Technical Analysis Trading Tools

A particularly popular method of trading forex involves using technical analysis to generate buy and sell signals. Read more...

FOREX INDICATORS: IS THERE A “HOLY GRAIL” OUT THERE?

Just like gold prospectors of old, every trader suspects that someone out there has the "secret", the indicator beyond all indicators that will always give infallible signals and lead him to his vein of gold. Read more...

Using Market Sentiment Indicators

Many individual traders who are not operating out of large dealing rooms in the Interbank forex market can find themselves somewhat challenged when it comes to gauging the sentiment of the market. Read more...

Automating Your Forex Trading

As the forex market moves enthusiastically into the electronic age, individual currency traders are increasingly turning to software products that help them watch the market and even assist them in performing the actual mechanics of trading without human intervention. Read more...

Regular and Hidden Divergence in Technical Indicators

The term divergence has two distinct meanings in common use among technical analysts and forex traders. The first usage refers to the situation that occurs on a chart where a new extreme seen in the price level does not result... Read more...