In the world of trading, the worst enemy to encounter is oneself. The emotional impulses stem from a person normally will win over the rational mind which results in bad trading decisions. Technical analysis is there to help us to put objectivity and rationalization back in place.
Forex technical analysis is a study of price action through pattern recognition and indicators to help us in the aid of forecasting the move of the market.
As technical analyst assumes that all fundamentals aspect of the market will be reflected in the price, all he needs to do is to focus of the price action of the market. The collective power of the market psychology is the force behind the movement of the market and often shows in a patterned way reflected in the charts.
History always tend to repeat itself and these technical indicators are in place to gather the past data of the market and make an indication for traders like you and me to unlock the codes to the possible market future behaviour. You do not need to worry about having to listen to so called expert on the prediction of the market through constant fundamental analysis and more often than not it is mostly their own opinion of what is happening.
What technical indicators do is to pick out the truth of the market psychology through the analysis of past data and present that to you. All you have to do is to find how to use these technical indicators to extract the information needed to support your trade decision. No emotions or unnecessary advices to steer you away from reality.
Human nature always present itself in patterns and cycles which is always reflected somewhere in the history of the charts. You have to spend time to decipher these data and make them useful for you. Do take note that although having indicators to aid you in your trade will be helpful but having too many indicators cluttering up your chart is a no go.
When you have too many, its like having lots of advisers telling you what to do and what do you do? You end up analysing most of the time and you lose your chance to trade. At most you should have only three to four indicators on your chart in that way you can fully harness the power of the forex technical analysis.
Feel free to use this article on your website or ezine as long as the following information about author/website is included.
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment