A repeat of the philosophical assumptions on which technical analysis is based is appropriate here before we begin the study of analyzing market patterns.
1. All available information and its impact on traders and the market are already reflected in a currency’s price.
2. Prices move in trends or patterns.
3. History repeats itself.
TECHNICAL ANALYSIS ALLOWS FOR AN INDIRECT STUDY OF ALL MARKET DATA, INCLUDING FUNDAMENTALS
Most technical traders (technicians) would agree that the underlying forces of supply and demand and the economic fundamentals of the market cause uptrends and downtrends. As a general rule, we are not going to concern ourselves so much with the reasons why market prices move up or down. Instead, we are going to discount the reasons why and are going to trade in agreement with the supporting technical indicators.
PRICES HOVE IN TRENDS
If one cannot accept this premise, there is no point in studying technical analysis. The Premier Trade trading method was written to help identify trends and their early stages of development for the purpose of trading in agreement with the direction of those trends. We follow trends because trends have shown that once they are in motion, they are most likely to continue rather than reverse.
Over the last hundred years or so, technicians have identified and catalogued chart patterns. They also have worked very hard at creating chart indicators (mathematical formulas) that show weakness or strength of market price. Research has shown that these patterns and indicators have worked in the past, and therefore when they repeal themselves, they work in the present and future.
There has been a tendency in the past to discount technical analysis and criticize it, calling it a “self-fulfilling prophecy.”
Charts come in various different shapes and sizes. Premiere Trade recommends the use of two types of price charts: bar charts and candlestick charts. Bar charts display price data in vertical lines, which represent price action during a given time interval. The bar connects the high and low of prices.
This is only a small token of the information that you need to know if you want to be really successful in forex. Sure, it is not easy to comprehend such information. That is why so many traders lose during their first days in forex.
Smart amateur traders use forex magic machines – special forex software. Forex magic machine is a forex robot that analyzes information and only then enters the market. Forex magic machines have no emotions and thus they do not make stupid mistakes.
Forex magic machine does not need any sleep and rest. It can trade 24/7. Moreover, it will trade smartly. This is a good option for most beginners who are afraid of losing money in forex.
You must know that forex investment is a risky investment, because forex trading in itself can bring both profits and losses.
Due to this we highly recommend to read more about the topic of forex investment, before you start investing any money on it.
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