Stages of technical analysis of the Forex market.

Technical analysis of the Forex market refers to the study of the dynamics of exchange rate movements. That is why quote charts for previous trading periods (time frames) are used as its main tool.

For analysis, graphs with time periods from five minutes to several years are used. It should be noted that on charts with long periods there is much less “market noise”, that is, false movements.

Therefore, the lines of the prevailing trend, the main graphic figures, as well as support/resistance levels are clearly visible on them. This allows you to make a relatively objective forecast of the most likely direction of movement of currency quotes. Experts in the field of trading on the global Forex market recommend conducting technical analysis every week before the start of the next five-day trading period. At the same time, they divide the process of such analysis into three stages.

1. Stage of wave analysis of the movement of the market price of the currency pair chosen for trading.

At this stage, the trader determines which specific wave - corrective or impulse - the price of the traded pair is on at the moment.

If on the correctional one, then which one - the second or the fourth? At the same time, a graphical model of the correction’s development is also determined. If the price is on an impulse wave, then it becomes clear which one it is on - the first, third or fifth? At the same time, the type of wave is also determined, which can be simple or elongated. It should be noted that the correct determination of the position of the current exchange rate is the most important point in the process of forecasting further price trends. 2. The stage of graphical analysis of the price behavior of the traded currency pair.

At this stage, the Forex market trader carries out graphical constructions necessary to determine the most significant Forex levels - support/resistance, Murray, Fibonacci and others, as well as to identify graphical models along which price movement develops - “descending and ascending triangles”, “ pennant", "wedge", "flag", "double and triple bottoms and tops", "head and shoulders" and so on.

3. Stage of analysis of market indicator signals.

At the final stage of technical analysis, the trader takes readings of market indicators used in a specific trading strategy ( Stochastic Oscillator , Accelerator Oscillator, MACD, Awesome Oscillator, Momentum, CCI, etc.), and also determines the behavior relative to the price of moving average lines of different periods (Moving Average). The purpose of the third stage of technical analysis is to confirm or refute the conclusions that were made at the previous stages from Forex market indicators