Technical Analysis Principles

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Technical Analysis Principles Empty Technical Analysis Principles

Post  Admin on Tue Nov 03, 2015 11:40 pm

Technical analysis is a method of forecasting price movement by data comparison in different time frames and by eliciting regularities of market behavior. Application of a technical analysis in Forex activities is irreplaceable for the most of traders. Technical analysis is based on three general principles:

1. Market movement is taken into account by everybody
The price is always impacted by external factors, however technical analysis implies that investigation of political, economic and psychological factors influencing the price movement is not obligatory, as the main motion indicator is the price as it is. Any slight influence of factors is considered and reflected by a price, that is why it will be the object of study.

2. Price movement moves in a certain direction.
For applying a technical analysis it is necessary to comprehend the trend meaning. The main goal of a technical approach is determination of price move tendency in order to trade in compliance with this trend.

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