Technical analysis includes the exchange rate forecast based on statistical analysis and price patterns. (In contrast to fundamental analysis that studies the economic and geopolitical factors of a country)
Before we go, here is one of the most important lessons we ever learn: The most important element of technical analysis is the price action. That is, the same price bars and behavior are more important indicators.
The AT depends on statistics and patterns in price movement for its forecast. A combination of price action and technical indicators is the best way to analyze the market.
Another point is that you should NEVER make a decision with a single piece of analysis, whether indicator or price action. ALWAYS confirm their decisions to enter or exit the market with the crossing of several technical indicators or fundamental.
But I prefer FUNDAMENTAL ANALYSIS (AF) …
Well … At least there should not only AF. Here’s why:
The AT is easier to understand than the AF so your decision making process is greatly facilitated.
The AT is the same for all currencies braid. AF no.
The AT is very popular. The simple fact that many forex investors use it, means that in effect the expected movements often meet but have no fundamental basis for doing so.
The more confirmations in the OT, the more likely that your winning position again (if not saturate your chart analysis with too many technical indicators).
The most common indicator of AT are:
Moving Averages (PA) – Moving Averages (MA)
Moving Average Convergence / Divergence (PMCD) – Moving Average Convergence Divergence (MACD)
Relative Strength Index (RFI) – Relative Strength Index (RSI)
Retraction Fibonacci Levels – Fibonacci Retracement Levels
Bollinger Bands (BB) – Bollinger Bands (BB)
And what have the various tables of Time
Technical analysis can be performed in any time frame. That is we can analyze what happens to any of the pairs every minute, every half hour, every hour, every 4 hours, daily, monthly, weekly, etc..
Now the question is the million dollar Which one should I use? The answer is easy:
It depends on how long you have on your hands and have to spend much time in front of the monitor. The basic rule is that the less time available at your computer, learn to draw larger pictures of time, such as 4 hours, daily and weekly.
Anyway, my suggestion is that no matter what time frame analyzed, NEVER stop analyzing the daily chart.
A better way is through an analysis of the daily chart, but the use of smaller pictures such as the hour or half hour to find exact points of entry and exit positions important thing here is that know that longer time frames such as the weekly or monthly, are more accurate and show the long-term trends, but the points of entry are much less precise, requiring stop loss orders much larger and vice versa. In addition, you may only get 1 or 2 signals in the month to enter a position based on their strategy.
On the contrary, shorter time frames such as 15 minutes, means that even if their inputs and outputs will be more accurate, its profit targets will be much smaller and remember that the differential or spread, carry an element against .