HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
NordFX information and reviews
NordFX
86%

What is technical analysis?


Technical analysis in one of the most widely used methods of forecasting price movements. The basis behind this type of analysis is the supposition that on the market, history repeats itself, meaning that future movements can be determined on the basis of past price behaviour. Traders build their forecasts according to price changes on charts according to certain timeframes.

Simply put, technical analysis is the study of price history, through which traders are able to identify potential future trends. Traders use this type of analysis by applying technical indicators in their work, which can be found on any trading platform. These indicators come in various forms, so any trader can formulate a trading strategy for any instrument based on the findings they’ve made from one indicator or another.

Technical analysis can also be split into several types. One of the most widely used forms is candlestick analysis. Traders use this to help identify standard reversal models or trend continuation patterns (Head & shoulders, Double top, Wedges, etc.) from the price history. When one of these figures appears on the graph, traders can not only predict future price movements, but also the possible moment where a break may occur.

There are special programs able to conduct technical analysis for you. A program such as Autochartist analyses the market independently and tries to identify these patterns as they form. When they appear, the program sends an alert to the trader. Without needing to be by the computer to receive such an alert, the trader has only to react in a timely fashion to the message sent by the program. Autochartist does not need to be installed onto your computer either; it works as a web application and can also be integrated into the MetaTrader 4 platform.

Technical analysis is no less difficult than fundamental analysis. Novice traders, however, are usually recommended to start off with technical analysis, as they are helped by a multitude of various automatic programs, indicators, and advisors.

It is also important to note, however, that traders who achieve the most success do so with a combination of both technical and fundamental analysis, and by building forecasts based on a range of data from financial analysis.

#source


RELATED

Depth Of The Market: Definition And Meaning

Depth of the Market is a special technical indicator developed for the MetaTrader 4 terminal. It is designed to monitor the current price movement and also to determine the supply and demand zones...

What Is the Risk/Reward Ratio and How to Use It

The risk/reward ratio tells you how much risk you are taking for how much potential reward. Good traders and investors choose their bets very carefully. They look for the highest potential upside...

Introduction to technical analysis in forex trading

Learn how traders use technical analysis to enhance their strategies and make informed trading decisions...

What Is a Bear Trap in Trading and How to Handle It?

You may have heard of a bull trap, but if you haven't, we recently covered this topic in an article. In this guide, we'd like to tell you about the opposite event in the market: a bear trap...

What is Fundamental Analysis?

Understanding the core of an activity always makes it easier to do it regardless of how complicated it is. That is the case with fundamental analysis. While it may be done through...

T4Trade: What is Market Analysis in Forex

In this article, we discuss what is market analysis in forex and go into detail regarding fundamental and technical analysis...

Sentiment analysis for Forex traders

There are many ways to level up your Forex skills, but defining the trends is a necessity if you want to place successful orders. So, how do you identify a trend...

Trading Chart Patterns: The how-to guide

One helpful skill for traders is learning how to trade chart patterns. But what is chart pattern analysis and how reliable is it? Let’s explore the most common patterns recognized...

Three technical indicators you should know about

Seeing a list of indicators, you might easily get lost. This article will help you learn about 3 essential indicators that will help you define your trading strategy for any time period...

Mastering The 50-Day Moving Average And Its Applications in 2023

In the ever-evolving realm of financial markets, gaining a deep understanding of various tools and indicators is essential for deciphering price trends and making informed decisions...

T4Trade: Technical Analysis Techniques

Technical analysis techniques are vital for making informed trading decisions and to reduce the risk of large capital losses. In this article, we explore some of the most popular techniques and tools used by traders worldwide...

Currency Strength Meter: Complete Guide

Any trader needs to define the direction of the currency pair. It is also important to remember that the market movement is defined by the strength and weakness...

Bullish vs. Bearish Market: How to Distinguish

In trading, you should focus not only on learning new strategies and indicators but also on discovering the terms that are widely used within the trading community. This will help...

Bull Flag Pattern in Trading - Open Long Trades

In the world of technical indicators and patterns, finding a reliable, workable tool that would help you predict price direction is challenging. However, they exist...

How to Calculate the Value of One Point in Forex

A point is a very important concept for calculating possible profit or loss in financial markets. When conducting transactions, you need to clearly understand how much...

The US Dollar Index Chart. What is it, and how do you use it?

Many traders use indices in their trading. The stock market offers a huge variety of indices such as the S&P 500, NASDAQ, Dow Jones, etc. They provide a picture...

How to Use the US Dollar Index (DXY) in Trading

The US Dollar is the most traded currency in the world. It is used as a currency of the majority of international transactions while also being part of the most popular currency pairs on the Forex market...

Stop Orders Demystified: A Comprehensive Examination

In the intricate tapestry of financial markets, an arsenal of tools and techniques awaits traders and investors. Among these, trading orders serve as the backbone of any robust trading strategy...

Basics of Options Trading: Understanding Put vs Call Option

A popular tool for speculation is options trading, where money can move fast, and traders can gain (or lose) their stakes quickly. But what are options contracts...

How to Trade Shooting Star Pattern

One of the most popular and reliable methods of finding entry and exit signals is identifying candlestick and chart patterns. These patterns are a part of technical analysis...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.