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Understanding Technical Analysis for Beginners

Technical Analysis

Forex technical analysis is something that is used to provide insights into the way the market is moving, and predict currency changes. Unlike forex fundamentals, which look at current events and use things like interest rates, seasonal changes, holidays, elections and even wars to predict currency movement, technical analysis is based on the idea modeling future movements on past performance.

Forex technical analysis relies on trendlines, and uses the concept of support and resistance levels. It predicts the movements of the markets bas

trend line

ed on the way that the markets have moved in the past – using complex mathematical formulas to predict that the index will be supported (unlikely to fall below) a certain point and that it will encounter resistance (be unlikely to rise above) another point.

Getting started with technical analysis is quite easy since most trading platforms offer a good system for showing the trendlines and bars, as well as applying things like the fibonacci sequence, to your currency graphs. This means that without having to do any complex working yourself you can get a good look at the patterns – the only challenge for you is figuring out how to interpret them.