It’s time to get right into the thick of things and start learning about technical analysis, one of the most common forex trading strategies. In Chapter 6 we will discuss some of the most popular forex trading strategies.
- Support and resistance levels
- Price action
- Chart patterns
Technical analysis methods acquired huge popularity towards the end of the 20th century. The Internet revolution exposed millions of traders throughout the world to electronic online trading platforms. Traders of all types and levels began using tools and real-time analyses.
Technical tools collect every piece of information on past trends in an attempt to determine present and future trends. Price patterns point to the general activity of market forces. Technical tools work best in busy markets and sessions.
Technical analysis’s most significant advantage is the ability to identify entry and exit points. This indeed is high added value (which is the main reason that technical analysis is the most popular forex trading strategy). Most successful technical traders are those who base their trades on long-term trends but know when to listen to market forces at a given moment. Another important point is that most technical tools are very simple to use. Each trader can choose his favorite tools to work with. In the next lesson, you will learn all there is to know about the most popular tools.
To get ready for the next lesson, you are now going to learn a number of techniques, terms, and elementary aids for technical trading, so you had better pay attention!
Recommended Go back to Chapter 1 – Preparation to Forex Trading Course and revise such topics as PSML and Basic Trading Terminology.