Principles of Forex Technical Analysis
To come up with a forex trading strategy a trader will need to learn about the following forex technical analysis concepts
What's a Forex Technical Chart?
Forex technical analysis includes the use of forex charts to analyze forex price movements using forex price patterns in an attempt to predict the future forex price movement based on the forex price patterns.
What are Support & Resistance Levels in Forex Trading?
Support and resistance levels are used to analyze forex chart areas that act as barriers for forex price movements. Support levels is like the floor of the forex price while resistance levels is like the ceiling of the forex price.
Forex traders use support and resistance levels that form on the forex charts to set their forex stop loss orders or forex take profit orders. Forex traders also use support and resistance levels on forex trading to open new forex trades & to close open forex trades.
Forex price will normally bounce of these forex support and resistance levels and this is why these forex support and resistance zones are used by traders to generate forex signals.
What are Forex Trend Lines?
Forex trend lines are used in forex trading so as to figure out the direction of the trend.
An upwards forex trend will be drawn on a forex chart when prices are moving upwards. Therefore, this upward trend line will be used to show an upward movement of forex prices - upward forex trend.
A downward forex trend will be drawn on a forex chart when prices are moving downwards. Therefore, this downward trend line will be used to show downward movement of forex prices - downward forex trend.
Once a forex trend line forms on the forex charts then forex prices are likely to keep moving in the direction of the trend line for some time until when there is forex trendline break forex trend reversal signal.
What are Forex Indicators?
Forex technical indicators are forex trading tools used by traders to generate forex signals.
There are various forex indicators used in forex technical analysis & these indicators will be used to analyze the forex trend forex price movement as well as the momentum of the forex trend.
Some of the most commonly used forex technical indicators include:
Moving Averages FX Trading Technical Indicator MACD RSI ADX Stochastic Oscillator Technical Indicator
What are Forex Candles Patterns?
Forex candlesticks patterns are forex candlestick formations that are used to interpret the forex price movement based on the pattern of a forex candlestick or a pattern of a series of forex candles.
The various forex candlesticks patterns used in forex trading are:
Continuation Forex Candlestick Patterns Reversal Candlestick Patterns
What are Forex Chart Patterns?
Forex chart patterns are commonly repeating price patterns that form on the forex charts.
These forex chart patterns are commonly used by traders to analyze the future forex price movement based on the type of forex chart pattern has formed on the forex charts.
The various forex chart patterns used in forex trading are:
Continuation Chart Patterns Reversal Chart Patterns
About Forex Technical Analysis
Forex traders wanting to learn more about each of the above forex technical analysis tools can get more data from the learn forex trading section - forex technical analysis concepts that explains the above forex technical analysis trading concepts.
This forex technical analysis concepts lesson can be found on the main side navigation menu of this learn forex trading web site under the learn forex lessons section.
