What is Technical Analysis?
When we talk about becoming a good trader we have to look at fundamental and technical analysis.
we noticed that in the last half a year there has been a huge insurge of people and traders and people that want to be traders…. some day that were interested in Forex Technical analysis and more often Bitcoin Technical Analysis.
This interest in technical analysis bitcoin as well as ethereum technical analysis
Technical analysis is the study of the price movement on a chart of a particular Forex currency pair or other market. We can think of technical analysis or “T.A.” for short, as a sort of framework that traders use to study and make use of the price movement of a market.
The primary reason that traders use Technical Analysis is to make predictions about future price movement based on past price movement.
Technical analysts believe that all current market variables are reflected via the price movement or price action on a price chart.
So, if we believe that all market variables are reflected via price movement, it only goes to reason that we don’t really need much else to analyze and trade the markets besides price.
I am a technical analyst and so are the members in my trading community, we prefer technical analysis. because we agree with the idea that all market variables are reflected via price action, so we see no reason to use other means to analyze or trade the market.
That’s not to say that having some knowledge of fundamentals and news events is a bad thing, but we just don’t rely on them heavily
Technical analysts look for patterns on the chart that tend to repeat themselves; they do this to develop their trading edge from.
The underlying logic here is that since most price movement is driven by us human beings, certain patterns will repeat themselves in the market as human beings tend to be repetitive in their emotion and interaction with the market.
Technical analysis also encompasses learning to analyze the market structure; find trends, support and resistance levels and generally learn to ‘read’ the ebbs and flows of a market.
There is obviously discretion involved here and I will be the first person to tell you that technical analysis is more of an art than a science. so there is a talent aspect here!!
That said, it is something you will get more comfortable with and better at given time and practice.
Technical analysis forms the back-bone of my core trading method of price action,
which is simply a derivative or off-shoot of ‘traditional technical analysis.”, except with more clarity and more concise strategies that don’t involve confusing Forex indicators or things like Elliot Wave Theory that are far too messy and open to interpretation for me to believe they are worth trading or teaching.
Most traders instantly think of a price chart when someone mentions the word “technical analysis”.
Price charts provide us with an amazing amount of useful data that paints a complete picture of a market’s historical and current supply and demand situation, as well as the price levels that the market participants have deemed the most important.
As technical analysts we need to pay special attention to these price levels as price will tend to respect them again and again, indeed, much of my price action trading course is built around learning to identify and trade price action setups from key levels in the market.
Price charts are also a reflection of all market participants’ beliefs about the market and market variables. This means that by focusing your analysis and trading on a market’s price chart you can streamline your trading and at the same time analyze the end result of everything that contributes to the price movement of a market.
if you plan to start trading technical analysis and you want to learn technical analysis then there are numerous books on technical analysis and fundamental analysis vs technical analysis explinations.
the last couple to of books and Ebooks in my case were more indepth analysis on , btc technical analysis, eur usd technical analysis, gbpusd technical analysis and gold technical analysis.
These are the most popular ones at this moment and you will find a huge amount of literature explaining these for you.
if you are interested i can send you my list of best technical analysis books that will explain through different ways of explaining what is Technical Analysis and how you should apply it.
, Just drop me a note
Now part of what i want to explain is there there is no better education then following what professional traders are doing and learn to see through their eyes the technical analysis.