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Is Forex Technical Analysis useful? What are the secrets of Forex Technical Analysis?

2022-01-19

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Everything needs to be analyzed by data, and then the data obtained from the analysis will be used to guide actions. The same is true of foreign exchange investment. Investors who understand foreign exchange technical analysis are often more profitable! So is specific foreign exchange technical analysis useful, and what are the secrets of foreign exchange technical analysis? This article will introduce to you.

Is Forex Technical Analysis useful?

Under normal circumstances, if investors believe in "value investing", they will devalue short-term methods such as "technical analysis" to be useless. In fact, no matter what kind of technical analysis, it will not be useless. Because the fluctuation of the foreign exchange market itself is a group movement of people, and the fluctuation of people's emotions is in line with the laws of psychology, and there are traces to follow.

Throughout all the foreign exchange technical analysis methods on the market, three factors are involved: price, volume, and time. Market traders process all kinds of information every day, and reflect their own market cognition and psychological factors in the transaction. The cognitive changes and emotional fluctuations of market traders are all written in these three factors. Technical analysis is first derived based on a large number of trading statistics. In the process of statistics and research, the group behavior of traders will be "recompiled" intentionally or unintentionally.

Because of the statistical significance, there is a general rule in technical analysis, that is, the more participants and the larger the market value of foreign exchange or index, the more individual differences can be eliminated, and the more useful technical analysis can be. At the same time, the shorter the sample time, the greater the randomness of short-term fluctuations; the longer the sample time, the more statistically significant the technical analysis will be, which is why the shorter the trend, the more difficult it is to judge.

The Secret of Forex Technical Analysis

First, long-term patterns are more important than short-term patterns

The short-term trend of the foreign exchange market operates in a relatively small time frame and interval, and this trend is easily affected by various external factors and changes in the market. Therefore, it is relatively difficult for foreign exchange traders to grasp the short-term trend of the market, and it is easy to fall into various influencing factors and lose the direction of judgment.

Second, the market position is more important than the shape

There are many rules in technical analysis, but if these rules are not analyzed and judged in combination with position patterns, then these so-called rules will become empty talk, without any operational significance of timing, and even less valuable for investors' timing operations.

Third, market direction is more important than location

The level of foreign exchange trends is not important, the trends in the market are worth learning from and following. The most important and most difficult thing for investors to analyze is to analyze the direction of the market, which is the so-called overall trend.

It can be seen that the role of foreign exchange technical analysis is very large. If there is no foreign exchange technical analysis, then investment is blind, and the probability of profit is greatly reduced. Of course, if you want to really do a good job of foreign exchange technical analysis, it is difficult for beginners to do it. With the accumulation of experience, it will be much easier to do foreign exchange technical analysis.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Is Forex Technical Analysis useful? What are the secrets of Forex Technical Analysis?

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