Methods of technical analysis

There are several basic methods of technical analysis in the Forex market that allow you to assess the current situation. A novice trader should be familiar with all the available options before choosing the most suitable one.

You should begin your study with simpler and more straightforward concepts and then move on to more complex approaches.

The most complex market research method doesn't always yield the most accurate results and, consequently, the long-awaited profit.

All existing methods can be roughly divided into graphical, cyclical, channel, and level-based methods.

There are also other options for market research, but today we will focus on the ones listed above

1.    Graphical methods Technical analysis methods are based on studying the chart of a currency pair's movement and are quite extensive. The most well-known example of this method's application is the detection of graphical patterns that periodically appear on charts.

These patterns may indicate the continuation of an existing trend or signal a price reversal.

Virtually every Forex strategy incorporates elements of graphical analysis, so this section is worth exploring in more detail during the study - http://time-forex.com/ys

2. Channel patterns – essentially a branch of the previous group, this method is based on the assertion that the price almost always moves within a specific price channel formed by support and resistance lines.

When applying this method of technical analysis, the width of the existing channel, the speed of price movement, and the magnitude and frequency of corrections are analyzed.

One such simple strategy is described on the page - http://time-forex.com/strategy/torgovly-v-kanale

3. Cyclical - based on the theory that exchange rate movements on the forex market follow a cyclical pattern. That is, fluctuations repeat periodically and have a similar structure. One of the most well-known theories based on this method is the Elliott Wave Theory.

Cyclical methods are used in analyzing medium- and long-term timeframes; this technique is practically never used on short timeframes.

4.  Levels - constructing levels is also widely used in technical analysis of the forex market. In addition to providing an idea of ​​the market situation, the resulting levels also serve as benchmarks for opening new trades or exit points from existing ones.

The most well-known levels include Murray, Fibonacci, pivot points, DiNapoli, etc.

One of the most popular strategies on levels is the strategy based on the Stochastic indicator - http://time-forex.com/strategy/strategiy-stohastik which is loved by many traders.

Forex technical analysis methods require the use of complex calculations and constructions, therefore, to facilitate the trader's work and reduce the number of errors in calculations, special indicators .

They perform calculations based on specified parameters and can independently display the resulting data on currency pair charts. Furthermore, such scripts are also excellent at plotting levels, channels, and searching for chart patterns and candlesticks.