What is technical analysis?

In the financial markets, there are two main methods of market analysis. Both these methods are employed by traders in order to analyse price movements and make wise investments.

These two methods are known as Technical Analysis and Fundamental Analysis.

The main difference between the two schools of thought is their approach towards their analysis of the market. To determine the future activity of an asset or commodity, technical analysis studies its historical performance, focusing on its price movements in the market. Conversely, fundamental analysis concentrates primarily on external factors that include economic, geopolitical and social conditions, and how these affect or could affect the price of an asset.

In this section, we will look at the basics of technical analysis in more detail, examine the importance of chart patterns, moving averages and indicators, and show how you can use technical analysis to improve your trading style.

Did you know?

Papyri PCZ I 59021, which dates back to 259/8 B.C., shows the exchange of coinage in ancient Egypt.

Word of the day
"Long Term Trader" - A forex trader who keeps positions open for extended periods of time.
Pro Tip

Do not open a real account before doing some demo-trading.

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