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Technical analysis (Forex)
TECHNICAL ANALYSIS
Identifying chart patterns is simply a form of technical analysis. And technical analysis is just a method for trying to forecast market trends and turns. Hundreds of years of price charts have shown that prices tend to move in trends. (I'm sure we've all heard the saying, 'the trend is your friend'.) Well, a trend is merely an indicator of an imbalance in the supply and demand. These changes can usually be seen by market action through changes in price. These price changes often form meaningful chart patterns that can act as signals in trying to determine possible future trend developments . (More on trends.)
Let me also say that chart patterns are nothing new. In fact, many technical indicators get their origin way before any of us were even born. However, as for chart patterns, their meaning, implication and subsequent applications have been overlooked by many traders and investors in my opinion, until recently (relatively speaking of course.)
Research has proven that some chart patterns have high forecasting probabilities. These patterns include;
• symmetrical triangles, ascending triangles and descending triangles, wedges, flags and pennants, rectangles and the head and shoulders patterns.
Identifying chart patterns is simply a form of technical analysis. And technical analysis is just a method for trying to forecast market trends and turns. Hundreds of years of price charts have shown that prices tend to move in trends. (I'm sure we've all heard the saying, 'the trend is your friend'.) Well, a trend is merely an indicator of an imbalance in the supply and demand. These changes can usually be seen by market action through changes in price. These price changes often form meaningful chart patterns that can act as signals in trying to determine possible future trend developments . (More on trends.)
Let me also say that chart patterns are nothing new. In fact, many technical indicators get their origin way before any of us were even born. However, as for chart patterns, their meaning, implication and subsequent applications have been overlooked by many traders and investors in my opinion, until recently (relatively speaking of course.)
Research has proven that some chart patterns have high forecasting probabilities. These patterns include;
• symmetrical triangles, ascending triangles and descending triangles, wedges, flags and pennants, rectangles and the head and shoulders patterns.
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