Graphic analysis for Forex.

When analyzing financial markets, price movement charts are widely used; one of the ways to study these charts is graphical analysis.

Graphical analysis is a component of technical analysis, a method of studying the market using graphical constructions that make it possible to identify the existing trend and more fully present the picture that has developed over the analyzed time period.

The main tools of graphical analysis are lines and figures constructed with their help.

Support and resistance lines :

Support line - drawn along two or more points reflecting the minimum price value, forms the lower border of the price channel.

Resistance line - for its construction, the maximum price values ​​​​for a given time period are used and it displays the upper limit of the price channel.

The resulting price channel is used to one degree or another by almost all Forex strategies .

Trend continuation or reversal patterns.

If you visually examine the chart of a currency pair, you will find that as the trend moves, it draws certain figures that reveal patterns in its movement; this fact is widely used when making forecasts for the further movement of the trend.

Trend continuation figures confirm the existing trend and serve as a signal for opening positions in the direction of the existing trend.

Reversal patterns - allow you to find out in advance about the upcoming change in the direction of price movement and makes it possible to close existing transactions without waiting for the stop loss or trailing stop .

Japanese candles.

Another tool for graphical analysis is Japanese candlesticks ; this type of chart is currently the most popular among traders.

Even one candle allows you to get some idea of ​​the situation on the time period that it displays; in addition, there are candlestick figures (combinations of several candles) that can indicate a continuation or an imminent reversal of the trend.

You will find a more detailed description of Japanese candlesticks and trend continuation (reversal) patterns in the book “ Intraday trading in the Forex market, ” which can be downloaded completely free of charge.