Technical analysis is the analysis of price data and statistical indicators that are based on that data. The data shows the flow of supply and demand. The supply and demand indicate current beliefs and ideas generated by human behaviour and mentality.

Chicken or egg? Should the traders engage in fundamental or technical analysis? Which one is the most important? The answer is no brainer: both. Even if you are scalping the tiniest movements of market, having some basics of the fundamentals can lead to improvements of your strategies that effectively alter the game.

In its 2009 report, the Foreign Exchange Committee at the Bank of International Settlements (the world's oldest international financial organization) evaluated the overall numbers of forex transactions to be $3.2 trillion.

With this amount money floating through an unregulated market with the trades executed over the counter with no accountability, forex scams can only raise with the promise of earning fortunes in a short time.

This article present basics of Dow Theory. Suffice to say that it is an absolute must for beginners of forex to know these principles.

The father of forex technical analysis Charles Dow was the founder of Dow Jones and Company which publishes the Wall Street Journal. Around 1900 he published a series of research papers to analyze the way prices the dynamics of prices at the Dow Jones Industrial Average and the Dow Jones Transportation Index.