Translated from Russian by Google Translate
2 Сентябрь 2009

Exploring Technical analysis

We can say that all successful traders use in their trading technical analysis forex, but you can not say with certainty that all the traders who use the trade of forex technical analysis, traders are successful. Of course, our belief that all successful traders use in their trading Technical analysis is not built on guesswork.


We are based on decades of data that speak in favor of the fact that technical analysis Forex is the most accurate way to assess and predict market movements. But we must note that this type of analysis, coupled with the ability to analyze the market with the foundations of fundamental analysis, will rise to a qualitatively new stage in its development and will allow you to have a significant advantage over other traders who do not use an integrated approach in analyzing and forecasting the foreign exchange market.

Technical analysis is called a strong method of analysis for the following reasons:

1. Mathematical calculations. Market dynamics and the mood of that trade is reflected in the schedule of prices

2. With this information you can with sufficient accuracy to predict the movement of the price range

3. Some price charts and models have the property over a certain period of time just to repeat its motion, so with the help of technical analysis can be seen, such models

And now we will look at important aspects of technical analysis, which can be used to successfully predict the price movement

1. When using any method of analysis of the currency market should take into account the current trend. She tells us the general direction of the market and his mood, as well as insure us from the commission of reckless transactions. I attended various seminars relating to currency dealing, but, strangely enough, most of the lecturers said that, I use technical analysis of forex, it is first necessary to comply with personal discipline and control their emotions.

2. Technical Indicators. Technical analysis is based on the use of technical means, koimi indicators are. Many profitable trading system can not operate successfully if they are built on using only one tool. The strength of technical analysis in forex is that it is used as an integrated method, that is, all the available tools are used together, and it allows you to get maximum impact.

3. Use evidence of moving averages. Moving averages can tell many nuances that can be used to analyze the current situation. First of all, using moving averages, we can check the availability or absence of trend. It is very important, because most traders prefer to play it in the direction of the current trend and only a small part of the follow-style trade rollbacks. But it is worth remembering that the use of moving averages is ineffective in sideways. In some cases, skillfully selected parameters for the moving averages give a «floating» line of support and resistance.

4. Use the method of market analysis, based on the Convergence Divergence Moving Average. To compute all the periods, which will be used moving averages and set the appropriate parameters. If you correctly calculate the parameters and time period, which will be used moving averages, then at the intersection of a faster moving average of the slower will give you a good guide to the opening or closing position. Technical analysis can be conducted using a simple, weighted or exponential moving average.

5. Bollinger Bands. According to the method the price is between two boundaries - the upper and lower bands. The range between the bands either increases or decreases depending on the availability of fluctuations in the market in a certain period of time. Sell in this case it is necessary, when the moving averages will be higher than the Bollinger band, and vice versa. Some traders use this tool with the RSI indicator and the method of convergence-divergence moving averages.

6. Fibonacci retracement levels. Try to describe some characteristic natural cycles. Then think about it, have you found any similarities. And it turns out that some of the hair’s exactly repeated. The same thing happens in the market. After the movement of prices, after a while the price graph repeats a similar motion, which can be identified with Fib levels.

7. RSI or relative strength index. He is one of the key elements which is famous for its technical analysis of forex. With the RSI, we can determine the point of extremes, that is oversold and overbought zone. By using these data, you can more accurately and timely to enter the market or withdraw from it.

List forex technical analysis tools, which we quoted above is not exhaustive, but is basic in its use. Most successful traders combine skillfully 3.4 indicator for more accurate signals.

Never forget that technical analysis does not allow us to forecast political events, incidents and other events of fundamental nature. But with it you can probably determine how the forex market reacted to these developments, and on the basis of these data to make a forecast on future trends.

And due to this projection, you can also properly allocate its fork Finance, accurately assess the future development of the situation and in accordance with this information can take more informed decisions that ultimately affect the amount of income derived from trade.