- This is the seventh of a ten-part series in which we walk through articles from DailyFX Education[1].
- The aim of this series is simplicity while covering some of the more important aspects of the FX market along with traders’ strategies and approaches.
- If you would like to access the full suite of educational articles offered by DailyFX education[2], you can get started here: DailyFX Forex for Beginners[3]
Technical analysis is basically just an examination of the past. There are two major items that can be gleaned from this examination, and they pertain to trends and support and resistance. This can allow a trader to see if there has been a trend in place and, if so, they can look for that trend to continue. This can allow for a bias of sorts, so that traders can approach a bullish market with rising prices with the goal of buying, anticipating that this trend might continue.
Remember, the past does not predict the future, and technical analysis should not be considered a predictive tool. More important than finding trends that might continue is finding prices that might open the door for opportunity.
This is where support and resistance come into play, and can lead to potential strategy for traders. To get acquainted with support and resistance, the article below will get you started.
A Guide to Support and Resistance Trading[4]
After developing a basic understanding of support and resistance, we can start to sync that information with the premise of supply and demand. This is important because supply and/or demand is what will help to impact future price movements.
The Forces of Supply and Demand[5]
After you understand basic support and resistance and
