Don’t waste your time – keep track of how NFP affects the US dollar!
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Technical analysis (TA) is a method of predicting the future performance of an asset’s price (in our case, the price of a currency pair) on the basis of its historical performance.
In other words, technical analysts study financial charts in order to determine what will happen with the price next.
In contrast to fundamental analysis which is regarding the “value” of the asset, technical analysis is only interested in price, volume and other market information. Some traders use either technical or fundamental analysis, while others combine these two methods to make trading decisions.
TA is based on the Dow theory, which is an approach to chart analysis proposed by Charles Dow (1851–1902), co-founder of Dow Jones and Company and the first editor of The Wall Street Journal. The other great contribution to technical analysis comes from Japan, where a specific type of chart was used for tracking the price of rice since the 1600’s.
Read the technical analysis of market by FBS analysts every week
Technical analysis involves the study of price action as well as the use of technical tools and indicators. The term “price action” refers to movements the price makes. Price action trading means that you take hints on whether to buy or sell based only on the price you see on a chart. Such method suggests that you are not using technical indicators or give them a very little weight in your decision making.
In this section of our educational materials, you will find the most useful and comprehensible information about the TA tools. You will find out more about trends and will learn how to use technical indicators. Understanding of the logics and instruments of TA is a key to successful trading.
