Read Technical Analysis
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Technical analysis is study of price charts to learn how to predict price movements in the market.
Technical analysis uses historical price chart data to predict the next likely movement of price trend.
XAUUSD technical analysis also include the use of various price patterns that can be identified on the charts by traders. These price patterns are identified as commonly repeating price patterns which can be used by traders to predict next likely market movement based on analysis of these commonly repeating chart price patterns.
Traders then create various xauusd strategies that incorporate these technical analysis techniques in their xauusd plan and then use these xauusd strategies to generate signals and determine when to buy xauusd, when to open a sell trade & also when to close a trade position.
Technical Analysis is Based on 3 Factors Common in Market:
1. Price Moves in Trends
Price movements follow trends. This means that after a trend has been established, the future market price movement is more likely to be in the same direction as the trend than to be against it. Most xauusd strategies are based on this analysis concept.
2. Price Discounts Everything
Technical analysis only factors price movement & assumes that, at any given time, a price reflects everything which has or could affect the price. This only leaves study of price, which is a product of the supply & demand for xauusd in the market.
3. History Tends to Repeat Itself
History repeats itself in terms of price movement. The repetitive nature of market movements is attributed to trader psychology: in other words, XAUUSD participants tend to provide a consistent reaction to the market most of time. Technical analysis uses patterns to analyze these chart price movements. Although these charts represent historical data they are still relevant because they illustrate price patterns that often repeat themselves.
Understanding this analysis in xauusd can be a valuable tool in determining the trend of any market & assisting with entry & exit levels for your trades.
The goal of these technical analysis methods is to help traders determine when a market is trending, and when it isn't. If the price is moving in one particular direction, then we want to be on board. If it is not, all you're going to do is lose money as you will get whipsawed around and this is not what we want as traders.
Unfortunately, many traders fight the trend and buying/selling in the opposite direction of a this trend direction, trying to pick a tops or a bottoms, only to see the market move further in the direction of the trend.
Another common mistake traders commonly make is adding onto a losing trade position, averaging a loss. This is not a good xauusd strategy especially in a strongly trending market. It is something which experienced trader never do. The trend is your best friend, never go against it.
XAUUSD technical analysis studies alert traders of setups & there are no certainties in financial market. Profits come from using proven xauusd strategies and methods to find a trending market and taking trades in same direction as that of the trend.
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