How Technical Analysis Work Well in Trading Forex?
Index 1. How Technical Analysis Work Well in Trading Forex? 1. Fibonacci Studies 2. Parabolic Stop and Reversal 3. Pivot Points
How Technical Analysis Work Well in Trading Forex? ď ˝
In the forex market if you are considering currency trading or you are already involved in forex currency trading, here money making a lesson that we can borrow from investors or traders who use technical analysis to help them make the investment decisions.
ď ˝
The goal of performing the technical analysis when the currency trading is to predict profitable currency pair movements by analyzing price trends.
ď ˝
The technical analysis principle in the equity markets is the same as those in the forex currency trading markets.
ď ˝
The actual difference between this two is that the forex market is open for 24 hours a day while the equity markets are not.
ď ˝
It means that specific analytics that takes time periods in consideration will need to be adjusted for currency trading in forex.
ď ˝
Any of these forms of equity technical analysis methodologies can be used when currency trading:
1. Fibonacci Studies ď ˝
This methodology is based upon the theory that changes in trends can be predicted based upon the prices interacting with lines based upon the particular sequences of numbers.
2. Parabolic Stop and Reversal ď ˝
This methodology is based upon examination of prices in comparison to "stop and reversal" (SAR) numbers that indicate your entry and exit points for a trade.
3. Pivot Points ď ˝
Mathematical formula used to determine when to exit in trade based upon the numerical average of the high, low and closing prices.
ď ˝
In this PPT, the critical difference between technical analysis in the Forex currency trading market and technical analysis in the equities market is the fact that it is probable to participate in Forex trading 24 hours a day, seven days a week.
ď ˝
Also, the critical difference is the primary reason that technical analysis works so well in currency trading.
ď ˝
ď ˝
For a technical analysis of various techniques to deliver maximum results, there need to be extended periods of time available for patterns to develop. Forex market never closes, and currency pairs are traded full day, definable patterns develop more promptly, and the technical analyst has plenty of forex currency trading data available to work with.
ď ˝
Because more data means more accurate forecasting outcomes, technical analysts can see better results, when combining technical analysis and Forex currency trading.
Thank You