Technical Analysis is one of the most important tools for successful Forex trading and every expert trader is supposed to use it to get an edge over other Forex traders. Technical Analysis is basically the way of forecasting the movement of price by comparing the data in different periods of time and taking in consideration the regularities of market behavior. Technical analysis is of vital importance for every Forex trader and it is an irreplaceable stuff. A technical analysis in Forex is based on the following main principles each of which are explained by XFR Financial Ltd here.
Everybody takes into account the market movement
The price is always affected by the external factors but Technical Analysis implies that the investigation of economic, political and psychological factors influencing the movement of the price is not obligatory because the main motion indicator is the price as it is. Price reflects any type of slight influence of the external factors and therefore it is the main object of study in the Technical Analysis
Price moves in a particular Direction
It is necessary to comprehend the trend meaning if you are applying the technical analysis. The main motive behind technical analysis is the determination of price trend in a particular direction in order to trade in compliance with this trend. There are 3 types of price trends-
- Bullish Trend- When the price goes up
- Bearish- When the price goes down
- Flat- When the price has no fixed direction
During the movement of the price you can elicit each type of trend but only one of them can be the major as the rule. The tendency change can take place only if certain signals are given by it.
XFR Financial Ltd – History is repeated
This principle says that price movement repeats itself on different time intervals and in the course of history the rules and analysis do not change. The dynamics of the market is studied by the means of different Forex charts during the XFR Financial Ltd technical analysis. Here are the main charts and tools for the analysis-
- Japanese Candlesticks
- Bar charts
- Line Charts
- Wave Analysis
- Trend Indicators
In the currency market the technical analysis is the foundational instrument for forecasting. The technique of analysis is found useful by a number of Forex traders and professional brokers who have made a considerable profit in this field. Many professional traders make use of the technical analysis in formulating the Forex strategies which are used by them in Forex software platforms to do systematic trading. Thus the use of Technical analysis at XFR Financial Ltd is very vast and every trader whether beginner or expert can be successfully profited by the use of Technical Analysis. Though it should be understood that the use of Forex software is not the only thing required by the Forex trading and there are many other things which to be considered for successful Forex trading.