Tuesday, December 30, 2008

About Forex Technical Analysis


The indicators used in Forex technical analysis are trend indicator to show price movement in one direction,

strength indicator to indicate the strength of the market, volatility indicator to describe the daily fluctuations, momentum indicator to indicate the speed in which a price moves and cycle indicator to indicate repetitive patterns.
The technical analysis being a thoroughly mathematical method it uses a number of established mathematical theories and formulae to predict the market. The most commonly used are Fibonacci series where adding the first two numbers you get the third, Elliot wave theory based on Fibonacci series and repetitive wave patterns and W.D. Gann's numbers using time-price relationship.
As with any financial forecasting method, there are some tips that can come handy while trading.
Read your charts and data thoroughly but do use the technical tools before you enter a trade.
Be very disciplined in your trading. If you are losing on some trade don't hold on to it for a long time hoping that it would turn around. Stick to your initial trading plan.
Remember charts and numbers are not the keys to your success in the market. The key is in being able to manipulate the mathematics based on the time period and the currency you are dealing with.


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