Technical analysis is a relatively young type of analysis, but it has already gathered a significant number of followers – especially in the forex market. The basic premise of technical analysis is that historical price action may predict the price action in the future. That means, all you need to make a trading decision is to just looking at the chart!
Trading the forex market involves great discipline and dedication to analyzing the market. To make a sound and reliable decision to sell or buy a currency, traders need to perform several types of analysis and strictly follow the rules of their trading strategy. Whatever your strategy is based on, it probably involves one of the following types of analysis, or a combination of them.
The Fibonacci Sequence is a popular concept in technical analysis. Traders around the world use Fibonaccis in their daily trading, making it a tool based on self-fulfilling expectations, and that’s why the price will often bounce of the Fibonacci levels. Let’s start with introducing Leonardo Fibonacci, the famous Italian mathematician.
Forex futures is a derivative of the Forex market. However, the volume of Forex futures trading is about 1% of the total Forex market. This market operates in much the same way as traditional futures, such as for commodities: The futures are purchased on a contract, which specifies the currency pair(s), the amount, the date of purchase, and the price of the purchase on that date.