Understanding the Technical Analysis and some indicators

We focus on the technical analysis in this article with a description of some of the most important indicators.

We could say, all rich traders use technical analysis, but not all technical analysis traders are rich although TA is the most accurate form of forex trading. It is also worth noting that the fundamental role in the price up or down paper. This gives you an advantage over the other operators.

Technical analysis is so powerful because some reasons

  • The representation of the numbers. All information and its impact on the market and traders is represented in the price of the currency.
  • The ability to predict trends and the forex market is very “trendy”.
  • Some card designs are consistent, reliable and repeat. TA helps us see.

It is a way of analysis from a technical point of view (I wish I had a dollar for every time I say “technical analysis”). We all know that prices move in trends. Studies have shown that those who “with the trend” of trade significantly increase their chances of profitable trade.

Trend aid, and maintaining general supervision of market knowledge are often less profitable entry points. I preservationist 2-day course will cost more than 2,500 Australian dollars, and most importantly, I learned from him, the need for discipline and control of emotions was me. The content was so basic that in the next 3-4 points I covered everything. So learn the “tools” technical indicators and their application will help you diagnose what the market is doing, but still expect ups and downs and trade with emotional control.

Stay with the trend, follow the money.

Find the price of the currency pair. If the EUR / USD pair is 1.4224 and 1.4180 at 1.4090, then it moves, then the market is in a downtrend. Just the fact that the market does not change the fact that what they could do. Listen to markets and backup indicators with what you say.

Moving averages
I will tell you, at any time within a certain period of interdenominational price. They move because they call you the last price when calculating the average chosen for the measurement of time.

They remain in the market, which will give an idea of ​​the trend reversal, they use a short average as an average movement of 5 to 10 days. Be detected by a combination of short and long term Massachusetts when the purchase signal through a medium to long term less in the direction of upward movement. Or sell signal when it crosses down. For example, it can be used up to five days compared to the 20-day moving average or 40 days of use, compared to an average of 200 sessions.

There are simple, linear moving averages weighted by the most recent or most weighted price exponentially. The latter is a favorite, as it considers all prices in a given period of time, but emphasizes the importance of recent price changes.

Based on moving averages, the MACD built difference 26 exponential mobile mezzanine mean and exponential moving average 12 days to 9 days, are used as a trigger line. If the MACD is positive when the market is falling rapidly, this could be a strong buy signal. The reverse also works.

Bollinger Bands (sounds like a rubber band)
Rates tend to remain between the upper and lower bands. Develop and close depending on the volatility of the markets at the moment. Selling signal is when the Bollinger Bands contrast and the average is higher than a buy signal. Some merchants use in combination with RSI, MACD, CCI and exchange rates.

Describe the cycles found in nature, and if the technical analysis is used to detect changes in trends in market evolution. After the price increase often drawn more times the entire original motion. Support and resistance levels often occur near Fibonacci levels.

Relative Strength Index market activity measures to see if it buys or resold. This is an early indicator so it helps indicate what the market is going to do (amazing!). RSI number indicates overbought Ahigher (so expect a bearish change) and a lower number indicates oversold.

Successful merchants usually 3 or 4 signals used to create a more conclusive signal before entering the transaction.

Always remember: “In case of doubt, the stay” The technical analysis does not consider the new policies, the economic profile of the country or the supply and the fundamental demand.

Technical analysis helps us understand the amount of money to risk in the trade. How and when to enter the market and how to exit trade for profit or minimize losses.

I hope you found this article useful.

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