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The basics of forex technical analysis

When it comes to forex, analysis is the most critical aspect of effective trading. Forex analysis is basically divided into three types including technical analysis, fundamental analysis, and sentimental analysis. Technical analysis is the framework in which traders study price movement. This type of analysis can help traders determine not only when and where to enter a market, but also when and where to get out. It is basically, more about probability of the market fluctuations.

In this session, the discussion is about technical analysis and the way it can be adopted in forex trading sessions for traders. The actual theory behind technical analysis is that a person can look at historical price movements and determine the current trading conditions and potential price movement.

Traders who use technical analysis are known as technical traders. The main evidence for using technical analysis is that, theoretically, all current market information is reflected in the price. If price reflects all the information that is out there, then price action is all one would really need to make a trade. Technical analysis looks at the rhythm, flow, and trends in price action.

That’s basically what technical analysis is all about!

If a certain price held as a major support or resistance level in the past, forex traders will keep an eye out for it and base their trades around that historical price level. Technical analysts look for similar patterns that have formed in the past and will form trade ideas believing that price could possibly act the same way that it did before.



Risk Warning: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. Trust Capital TC Ltd does not take into account your personal investment objectives or financial situation. Trust Capital TC Ltd makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast, or other information supplied by an employee of Trust Capital TC Ltd, a third party or otherwise.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trust Capital TC does not offer Contracts for Difference to residents of certain jurisdictions including the USA, Iran, and North Korea. Please consider our “Risk Disclosure“.



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