For many years Forex traders based their decisions in online trading on fundamental analysis, which explores the past and present economic and political conditions for predicting currency fluctuations in the future.
However, fundamental analysis is not very easy to master, it requires a large amount of knowledge and skills to analyze a lot of data. So today most traders use technical analysis, which is much simpler and clearer fundamental.
It is important to understand the 3 main principles of technical analysis:
1. All the possible forces will lead to the exchange rate, including economic and political events, but they do not have much significance. For technical analysis principal value are themselves exchange rate fluctuations.
2. The price of the currency should be a definite trend, which can be determined by looking at the schedule and its curves.
3. The price of the currency should not only be a trend, but will continue to follow him in the future.Movement of prices in Forex - is a sequence of reactions of people in a certain manner, which will continue for some time.
Remember that not yet developed the kind of analysis, which can 100% predict the trend for the currency exchange rate.
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