Forex Trading; Technical Analysis

Technical Analysis is the analysis of movement based on mathematical calculations (formulas, graphs, charts, etc.). By combining the movement of an instrument with a certain mathematical formulas. Can give you an idea or the predictions in the future. Well you should be careful and pay attention to is the words picture/predictions, so the accuracy is not 100%. The magnitude of accuracy is the art and its level of each trader. The more you diligently honed the formula, evaluate, integrate, etc then it would be more precise.

The purpose of traders use technical analysis, among others, to:

1. Volume of transactions
2. Trend
3. Level-level psychological (support and resistance)
4. Period of time.

This technical indicator created by many technical analysts, and if the collected amount can reach 250 more. With a variety of purposes. And with varying levels of complexity. However a little feedback you don't have to use all (because it is not possible, too), simply use whichever you really understand, the better a little and simple but you control and know which advantages and shortcomings.

The indicators apply mathematical and statistical sciences, in application of forex most they have given a direct indicator of facilities can you apply in the graph. For those of you who are already adept (forex & stats) you can also make the indicators according to your taste. Although this default indicators could already directly applied and used in the graph, You still need to study the usability and functionality of such indicators.

Some indicators are commonly used:
In outline there are 3 types of indicators:
1. Price Momentum Indicator (Oscillator): this indicator Type is used to identify oversold or overbought situation. Momentum indicators are also used to see if a trend still continues or weakened.
Example indicator:
-Stochastic Oscillator
-Relative Strength Index (RSI)
-CommodityChannel Index (CCI)

2. Trend Following Indicator: this indicator is used to identify the beginning and end of a trend or when a trend will change so that it can be known when the best time to open and close positions.
Example indicator:
-Moving Average (MA)
-Moving Average Convergence-Divergence (MACD)
-Directional Movements Index (DMI)
-Parabolic SAR

3. Volatility Indicator: this indicator is used to see the power market viewed from price fluctuations in a period of time. The market is said to have the volatility is high if the movement of the price goes up and down on a sharp or fluktuatif in which case the difference in price between the highest and lowest price.
Example indicator: -Bollinger Bands

The name of the technical indicators are also a lot of the same name of its discoverer. For example, Bollinger Bands indicator, created by John Bollinger, a Technical Analyst for Jewish descent.

read the next post ; fundamental analysis

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