Forex Education Center- General Explanation of Forex Technical Analysis,Technical analyst (or analyst) attempts to identify patron prices and trends in financial markets and seeks to exploit the patron . In the use of various methods or techniques then they put the price chart studies. The analyst tries to find prototypes patrons such as the reversal of the patrons who are already very well known by the English term head and shoulders (patron shaped like the head and shoulders), and also learn a variety of patrons such as price, volume, and moving averages of prices. Some technical analysts also use a psychological indicator of investor sentiment.
Technical analysts also often use a variety of indicators which are typically mathematical transformations of price or volume. This indicator is used as a tool to determine whether an asset is within a trend and direction of asset prices in the tern. Analysts also studied the correlation between price, volume, and margin in futures trading. These indicators such as relative strength index, and MACD. Another study also using the correlation between the change in the option and a put option / buy and its price.
Essentially, technical analysis study analyzes two areas of psychology that is investment and market analysis of supply and demand. The analysts attempt to forecast price movements in order to gain success in the trade as well as minimize the risk of loss as well as generate positive returns in the future by way of risk management and financial management
Many ways of learning technical analysis. The followers of the way of learning different techniques (eg candlestick chart, or more widely known by the term candlestick charts, Dow Theory, and Elliott wave theory often ignores the other approaches, but many are also combining some elements of learning. Analysts usually decide to using learning methods which are appropriate based on experience of what is reflected from an instrument at a particular time and what the meaning of patrons formed in the future.
Technical analysis is often contrasted with fundamental analysis is the study of economic factors that some analysts believe could influence prices in financial markets. Technical analysts believe that prices already reflect all such influences before investors realize the economy. Some traders use one of the fundamental technical or other exclusively, but some incorporate both in the analysis.
