Technical Analysis 101

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Avatar for Mehransoad
4 years ago

Technical analysis and fundamental analysis go hand in hand, It's important for the trader to understand them both before getting into forex trading.

Rule number one in trading is to respect the money and be indifferent about it, to elaborate on this important idea, It's absolutely crucial for the trader to feel indifferent about the money his investing, When you sell or buy any position at any given time, the odds are that the chart at one point will go against your favor and often traders find themselves shaking on their knees, Checking the chart every 5 seconds and this involved emotion will most probably encourage them to make irrational decisions and hence they will find themselves losing their money all the time, This among many other reasons is why 90% of traders lose 90% of their investment within their first 90 days of their trading career in forex.

When it comes to technical analysis there are many aspects to overlook, But the most important thing is to identify the support and resistance line on monthly/weekly and daily charts.

It's absolutely essential to find the correct support and resistance line and put it into testing to Identify whether its a fake out or not, More on fake outs later.

Once you have your support and resistance checked, Now It's time to find your trend line, Trend is the direction in which the candlesticks are moving, you must target the bottom of the candlesticks and draw a line in the direction of which candlesticks are moving .

More on technical analysis later, Practice drawing trend lines, Support, and resistance and get really good at this, use demo accounts to put your support and resistance and trendlines in test !!!

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