What is Technical Analysis?

Technical Analysis is a strategy traders use in order to study price movement.

Theoretically, you can determine the current trading conditions and potential price movement by looking at the historical price movements.

A person that uses technical analysis is known as technical analyst. Traders that uses technical analysis are called technical traders.

When using technical analysis, all current market data is reflected in the price, theoretically.

Traders that uses technical analysis often ascribe to the belief that ‘it’s all in the charts!

This is basically implying that all essential data is priced into the current market price.

If the price reflects all available information, a price action is really all you need to execute the transaction.

Technical analysis is all about the flow, trends, and rhythm on price actions.

Have you ever heard the saying “History tends to repeat itself”？

Well, that's exactly what technical analysis is!

If in the chart are showing that at a particular price has historically been held at a key support or resistance level, forex traders will closely watch it and execute their trades at that historical price level.

Technical analysts are looking for similar patterns that have formed in the past and will generate trading ideas with a strong belief that prices can move in the same way as before.

Technical analysis is probabilities, not predictions.

Technical analysis is to study the historical price movement in order to identify patterns and determine the likelihood of trade opportunities and future price directions .

So, how in the world do a person ‘Study historical price action？’

In Forex world, the first thing that comes to a trader‘s mind when they heard ’technical analysis is a Chart.

The easiest ways for Technical Analysts to visualize historical data is by using charts!

Technical analysts are often called ‘chartists’ because they live, eat, and breathe on charts.

You can easily identify patterns and trends by reviewing historical data. Doing this could help you find plenty of trading opportunities.

Moreover, for all traders who uses and rely on technical analysis, these price patterns and indicator signals tend to satisfy themselves.

The more Forex traders look for specific price levels and charts, the more likely these patterns will appear in the market.

However, you should always remember that Technical Analysis is a very SUBJECTIVE strategy.

Since Leonardo, Michelangelo, Raphael, and Donatello are looking at the same indicators or chart setup doesnt imply that they will concoct a similar thought of where the price might be going.

Whenever someone starts talking about Pivot Points, Fibonacci, or Bollinger Bands, it's crucially important to understand the concept of technical analysis so you don't bleed.

We knowhow you are feeling and thinking to yourself. “God, these people are smart. They use crazy words like ”Bollinger“ and ”Fibonacci“. I can never learn!”

Worry not folks! I‘ll bet that after you’re done with The School Of WikiFX, you will be just as “smart” as us too.