Axioms of technical analysis.

As is well known, in any business there are things that do not require additional proof; this also applies to technical analysis of the Forex market.

The axioms of technical analysis are the conclusions reached by generations of traders regarding exchange rate movements and the assessment of the situation in various markets.

They are universal for both forex and the stock and commodity markets.

All conclusions are grouped into several categories, so there aren't many axioms themselves:

• Price takes everything into account - you can find this axiom in almost any textbook devoted to technical analysis or forex. It states that price analysis allows you to get complete information and correctly assess the state of the market.

The price contains information about the latest events, the price expresses supply and demand for a trading instrument, and is reflected in social, political and economic factors.

• Price has a direction - the rate can rise, fall or move horizontally, but the direction always exists. Even during a flat , the price still changes, but these movements are hardly noticeable. It is the direction of the price that plays a decisive role in choosing the direction of transactions and is the main subject of analysis.

• History repeats itself - this axiom is much broader than just the statement that at certain time intervals the rate comes to similar values. Here we talk more about the emergence of patterns in forex , when a similar event causes a certain market reaction. For example, an increase in inflation causes a fall in the rate.

Knowing how the price behaved in a given situation, you can predict the direction of the trend if it is repeated in the future.

Correct understanding of these axioms will guarantee you successful Forex trading and significant profits.