Forex technical analysis training

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Introduction:

Analyzing the forex market is very important for making decisions about buying and selling. If you cannot have a correct view and assessment of the conditions and understand the market situation and each trade with a careful analysis, you will not get good results. In forex analysis training, the emphasis is always on learning different types of analysis, including technical analysis. To make decisions about buying and selling different currency pairs in the forex market, you must be able to evaluate the market correctly. Existing patterns and previous forex trends help traders in the process of technical analysis. Read more about forex technical analysis.

Familiarity with forex technical analysis

Charts containing various financial information from previous forex market conditions along with past price movements can open a way to analyze future market conditions. Financial and economic experts believe that markets follow repeating patterns. Repeating the process of moving and changing prices makes it possible to evaluate the current situation and predict the future situation. By examining the trading charts, it is possible to evaluate the forex market.

With technical evaluation, you can examine the conditions and trends of changes in currency pairs in the past. This evaluation is possible by applying special techniques and extracting patterns from the past. Technical analysis helps traders to arrive at the right and logical answer to the following critical and fundamental questions with the data and information mentioned above:

How will the process of changes and fluctuations in the price of currency pairs proceed?
What trading decisions do analysts and other traders make?
At what price is it better to enter a currency pair trade?
What is the expected profitability of the transaction?
What is the break-even point?

The requirement to learn forex technical analysis

Some people believe that technical analysis is not a good idea and believe in other methods such as fundamental analysis. Such a view is never raised by a trader or a professional trader. The reality is that professionals make decisions by having all the tools in hand that can help them reach better conclusions. The use of technical analysis and its learning along with other types of evaluations can be the key to success in trading. Therefore, do not underestimate Forex technical training.

Many people in forex are fooling around and don’t know technical analysis. You have to accept that the nature of this market is risky enough. Therefore, you should not take more risks by taking ignorant actions and entering without acquiring sufficient knowledge. From the legal point of view or the process of trading, there is no requirement to pass Forex technical analysis courses, but if you want to have significant success, you must think about equipping yourself with analytical power. The reason for the great importance of technical analysis is rooted in its three basic principles. This type of analysis shows that:

History repeats itself and is repetitive.
Prices change according to trends.
Prices tell many secrets.

History repeats itself and is repetitive

According to the principles of technical analysis, the process of changing prices is repeated in the forex market and various other financial markets. Experts use various indicators and metrics to show this issue on charts. By examining the market, we can see that a trend has been repeated many times over time. As a result, by being inspired by something like this, it is possible to predict a similar situation in the future.

Prices change according to trends

Technical analysis says that prices and rates of currency pairs change based on certain trends. In fact, it is based on this principle that it is clear that fluctuations in the forex market proceed with an evaluable and predictable trend. It’s not like price jumps are irrational and new patterns appear every time. To be more precise, the fluctuations and jumps in the rate of currency pairs in forex have an order.

Prices tell many secrets

In technical analysis, price is more important than anything else. As a result, by reviewing the price charts of different currency pairs, you can evaluate the future movements of the market. In this type of analysis, there is no concern about market margins and news that can affect the trading situation. On the other hand, reviewing the prices from the past until now will open the way for correct decisions in the future.

The important role of trends in technical analysis

In forex analysis training, you should pay a lot of attention to the trends. In fact, these are the things that will be the light of the decision in your buying and selling transactions. There are three main trends in technical analysis, which are simply as follows:

upward trend;
downward trend;
Neutral process.

The upward trend of the price

As it is known, this trend indicates the rise and rise of the price and rate of currency pairs. This trend is determined by drawing a chart of a currency pair over a period of time. The ascending graphs show that each time the changes have caused the rate to rise. Remember that the trend can face temporary drops in any time period, but it will quickly rise again. Buyers have more power in uptrends than sellers.

downward trend in price

In this process, it is clear that during certain periods of time in the past, the rates of currency pairs have been continuously decreasing and falling in price. There is a possibility of irregularities in such charts and trends. In fact, sometimes the descent does not proceed in a completely regular manner and all these issues appear and can be seen in the technical analysis charts. Downtrends show that there have been more sellers than buyers. The presence of more sellers causes the price to move in a downward direction. In fact, the sellers believe that the price is high and after they make enough profit themselves, they drive the rate down.

Neutral price trend

This trend, which is also known as the suffering trend, shows that the price has neither an upward trend nor a decline. Such a situation indicates that the price fluctuates within a certain range. In such situations, sellers and buyers are not in a superior position to each other, and the general trend of the market is not so recognizable. Neutral trends are usually seen after an upswing or downswing and indicate that no upswing or downswing is imminent. In fact, there is always a reversal on the way up or down.

Technical analysis indicators

Indicators are indicators that are predetermined and with their help you can measure and evaluate the future trend of the markets. Trading techniques already formed in the market are used to create these indicators. These trading techniques are developed and codified. Then they can be used in the form of indicators or metrics to evaluate the market.

If we want to be more precise about technical analysis indicators, it is necessary to emphasize that they provide a way to extract more information from the charts. Price charts contain a lot of information that is sometimes overlooked by analysts. Indicators express and specify this information in the form of mathematical formulas and calculations. In the aforementioned formulas, price chart information is used as input; For example:

lowest price;
the highest price;
last price;
the first price;
Turnover.

The output of the formulas are displayed graphically by placing this information in them and make the indicators. With indicators, you can learn about a variety of topics, including:

price trends;
the acceleration of price movement;
The influence of trends.

With technical analysis indicators, different strategies for making decisions in forex trading are created. Every trader can check the indicators and buy or sell by setting his own strategies and avoiding emotional and intuitive decisions.

Types of indicators in technical analysis

The function and output of technical analysis indicators are very diverse and are constantly being added to their number. Among their famous cases, we should mention these options:

Trend indicators;
Momentum indicators;
Volatility indicators;
Trading volume indicators (Volume).

Trend indicators

To analyze the forex market, you need to know the movement and fluctuations of prices. By examining the available charts of price movement, it is possible to find the direction of the price trend. Evaluating the change in the direction of the trends is not an easy task, but thanks to the trend indicators, it can be followed and done. This will be very useful for making trading decisions. Among the trend indicators, the following should be mentioned:

moving average indicator;
MACD indicator;
Ichimoku cloud indicator.

Momentum indicators

One of the most important things in forex market analysis is to pay attention to the strength of the trends. It is necessary to know at what point and situation the strength of the trend has increased and at what time it was weak and weak. By understanding these things, it is possible to analyze, predict and evaluate the price situation. Momentum indicators can help you find the strength of trends. Among the famous indicators of movement acceleration, pay attention to the following:

RSI indicator (RSI);
Stochastic indicator.

Volatility indicators

Sometimes, the price changes and fluctuations are so great that it becomes impossible to determine a specific trend. In such cases, you should use volatility indicators to determine the maximum possible profit. These indicators can determine the volatility of forex currency pairs based on their average volatility in a certain period of time. Among these indicators, we should mention ATR or average swing range.

Trading Volume Indicators

These indicators can also compare the volume of buying and selling transactions. As a result, they make it possible to identify market trends. Among the famous indicators in this field, we should mention the following:

Trading volume indicator (Volume);
Balanced Volume (OBV) indicator.

Other tools available in technical analysis

Among the other tools that are used in forex technical analysis besides indicators, we should mention the following:

graphical patterns ; It is from the information available on the price charts that you can draw conclusions about the trends.
Candle patterns ; Candlestick charts are among the most famous visual tools for technical analysis. These patterns give you clues about the behavior of buyers and sellers.

Advantages of technical analysis in forex

There are numerous advantages in using technical analysis. In forex analysis training, this type of analysis is welcomed due to the following advantages:

time flexibility ; It is possible to check the graphs of this type of analysis in different time frames from one hour to several years.
simplicity and ease ; Recognizing what is stated in these charts is not a difficult task, and despite the visual facilities it provides to the analyst, it makes it easy to understand the situation.
Provide details and accurate information ; In this type of analysis, the numbers are clear and there is no speculation. Therefore, they enable analysis that is based on correct and accurate details.
providing the possibility to recognize the point of entry and exit ; With technical analysis, you can determine at what point and when to enter and exit the market.

Disadvantages of technical analysis in forex

It is necessary to get acquainted with the disadvantages of technical analysis. Among the disadvantages of this method are the following:

lack of understanding and reading the same information ; One of the main drawbacks of technical analysis is that various interpretations of its information are created. For example, some see a rally as a sign that the price is rising in a situation, and others believe that the rally will be temporary.
Being free from side events and news ; In technical analysis, margins, market atmosphere and news are not considered. This issue can reduce the accuracy of such an analysis to some extent.
existence of conflicting signals ; To use technical analysis correctly, you need to have a lot of experience. Otherwise, the use of some data and information can be contradictory. For example, you may have entered the market as an inexperienced trader at the point of an uptrend on a chart, but it looks wrong because the uptrend was temporary.

at the end

Technical analysis is one of the tools that will help you in evaluating forex transactions. Of course, remember that you should not be satisfied with this. There are various other tools and metrics to check the market situation. You have to raise your knowledge about everything to be active in forex. It is only then that it is possible to compete with other traders. Remember, other people can know things that you don’t. In this case, they will be better equipped and more informed than you and will have opportunities that you were unaware of.

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