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 behavior and mentality.
The idea of support and resistance is one of the most popular in the short/medium term forex trading. It is possible to give a rigorous mathematical definition of the support and resistance based on the theory of oscillating signals and two dimensional curves, however, forex traders usually do not need it. Any professional forex trader will tell you that often the price hits certain levels several times and bounces off, creating an imaginary lower or upper bound.
Swing Trading combines fundamental and technical analysis to find significant price changes while avoiding idle times.The benefits of Swing Trading are a more powerful use of capital and higher returns. The disadvantages are higher commissions and possible volatility. Swing trading requires skills. The professional traders havemore experience, leverage, information and lower commissions; however, they are limited by the instruments they are allowed to trade, the risk they are capable of taking on and their large amount of capital. Knowledgeable forex traders can take advantage of these things in order to profit consistently
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.
This article present basics of Dow Theory which is an absolute must for beginners of forex. 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.