Forex Technical Analysis Tips
Forex Technical Analysis
Forex technical analysis tries to predict price movements of currency by examining the market variables and mathematical data. This includes market participants (on the national and corporate levels), price histories, fluctuations and other trends. The forex technical analysis makes the assumption that economic trends are not randomized. Therefore, the mathematical formulas used to develop a technical analysis make the assumption that a price will move in any of three linear directions: up, down or sideways.
When a technical analysis shows that a price is trending upwards, there is an increase in the currency value and then an increase in the amount of buyers. When a price trends downwards there is the opposite impact: currency value decreases and there are more sellers. A sideways trend shows that there is little movement in the value—but that does not mean that there are no buyers or sellers of a particular currency. This is because, much like the stock market, trader perceptions create buy/sell patterns. Therefore, it is important to examine the current currency market trends, as well as the trader mentalities.
A forex technical analysis uses charting tools to graphically depict trends based on current and historical information. The technical analysis may involve, but is not dependent on, fundamental analysis characteristics, such as governance and employment of the currency’s originating nation. The main benefit of technical analysis is that it is similar to your traditional stock market analysis---it shows value patterns, trends, rises, falls, and so on. In fact, many of the charting tools used in a technical analysis, such as the candles stick, is mimicry of tools used in the stock market. So while currency trading is a relatively new market for your average trader, the mathematics and chart processes are familiar.
Forex Charts
Sigma Forex is here to provide you with trading tools you may need to get the most out of the world's largest financial market and tries to give you as much currency trading related information as possible. Here you will find live streaming prices, demo accounts, Forex analysis, forecasts, statistics, commentaries and real time Forex charts to get clear understanding of factors affecting the foreign exchange market and make the most deliberate investment decisions.
Web Forex charts and news give traders a comprehensive view of Forex trading market and various aspects of currency rate movements. Sigma Forex trading platform is for active Forex traders and includes online Forex trading recommendations and information, live Forex charts, Forex quotes for most currencies, daily currency news and Forex forecasts – in other words everything needed to analyze and learn about the market price movements.
If you are thinking seriously about trading on Forex market, but want to get full control over your investments, web Forex charts, news, analysis and forecasts are available online on our website to let you become increasingly familiar with technology and gain greater control over your finances. Sigma Forex allows you to practice your Forex trading skills before risking any money by using demo account that will help you to get real-market experience with live Forex charts, rates and news affecting the price fluctuations. Don't miss a chance to practice Forex with tradable prices, real time data and world breaking news, real time Forex charts and technical indicators available online.
In order to make your Forex trading as productive as possible, you need to get the most of the information at your finger tips as well as plenty of useful tools, such as real time Forex charts, daily market comments and news, Forex forecast and Forex tutorials. Sigma Forex is an innovative foreign currency exchange broker that is here to help you start exploring the world of currency trading in the most effective manner.
The Meaning of FOREX Price Charts and How to Use Them
There is one very important factor that you should consider with great care if you are willing to become a successful, profitable Forex trader. This ever important factor that must be always present in the trader’s portfolio, is the ability to read the charts.
The beauty of FOREX charts, as opposed to charts used for, say, day trading stocks, is that they are pretty easy to interpret and use. They’re a reflection of a slower-moving, stable economy (the one of a country) compared to the future and daily drama of company reports, Wall street analysts and shareholder demands.
And, unlike stocks, currency charts rarely spend much time in tight trading ranges and have the tendency to develop strong trends (even though the FX market may be volatile, it’s more predictable). And, rather than tens of thousands of stocks to analyze, you only have a few major currencies to trade.
The most common types of price bars, used in FOREX trading, are the Bar Chart and the Candlestick chart:
Bars Charts - Price bars are a linear representation (a line)of a period of time. This enables the viewer to see a graphic representation summarizing the activity of a specific time frame. For example they can be one minute or five-minute time intervals depending on the system you are using. Each bar has similar characteristics and tells the viewer several important pieces of information. First, the highest point of the bar represents the highest price that was achieved during that time period. The lowest point of the bar represents the lowest price during the same period. Regular bars display a small dot on the left side of the bar which represents the opening price of the period and the small dot on the right side represents the closing price of the period.
Candlesticks - Japanese Candlesticks, or simply Candlesticks as they are now known, are used to represent the same information as Price bars. The only difference is that the difference between the open and close form the body of a box which is displayed with a color inside. A red color means that the close was lower than the open, and the blue color represents that the close was higher than the open. If the box has a line going up from the box it represents the high and is called the wick. If the box has a line going down from the box, it represents the low and is called the tail. Many interpretations can be made from these “candlesticks” and many books have been written on the art of interpreting these bars
