UNDERSTANDING

TECHNIC AL ANALYSIS
IN FOREX

In this presentation we will discuss what is

technical analysis, how can we use it & why it’s
important in Forex

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 DEFINATION

1. identifying trend
Technical analysis is the study of
historical price action in order to
identify patterns and determine
probabilities of future movements in
the market through the use of
2. Identifying support/resistance through the use
technical studies, indicators, and
of price charts and/or timeframes
other analysis tools.
Technical analysis boils down to two
things:

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 CONTINUE

Markets can only do three things:

move up, down, or sideways.
Prices typically move in a zigzag
fashion, and as a result, price action
has only two states:

• Range – when prices zigzag

sideways
• Trend – prices either zigzag higher
(up trend, or bull trend), or prices
zigzag lower (down trend, or bear
trend)

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 WHY IS
TECHNICAL
ANALYSIS
IMPORTANT?

Technical analysis of a
market can help you
determine not only when
and where to enter a
market, but much more
importantly, when and
where to get out.

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 H OW C AN YOU US E
T E C HN ICAL
AN ALYS IS ?

Technical analysis is based on

the theory that the markets
are chaotic (no one knows for
sure what will happen next),
but at the same time, price
action is not completely
random. In other words,
mathematical Chaos Theory
proves that within a state of
chaos there are identifiable
patterns that tend to repeat.

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 CONTINUED

This type of chaotic behavior is

observed in nature in the form of
weather forecasts. For example, most
traders will admit that there are no
certainties when it comes to
predicting exact price movements. As a
result, successful trading is not about
being right or wrong: it’s all about
determining probabilities and taking
trades when the odds are in your
favor. Part of determining probabilities
involves forecasting market direction
and when/where to enter into a
position, but equally important is
determining your risk-to-reward ratio.
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 CONTINUED

Remember, there is no magical

combination of technical indicators
that will unlock some sort of secret
trading strategy. The secret of
successful trading is good risk
management, discipline, and the
ability to control your emotions.
Anyone can guess right and win
every once in a while, but without
risk management it is virtually
impossible to remain profitable over
time.

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 THANK YOU

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