Core Assumptions and Logic
Technical Analysis assumes that prices move in patterns and that similar past conditions may produce similar future reactions. Trends, support-resistance levels, and cyclical patterns are identified on the chart.
It is a method for predicting future price direction not only in Forex but across all market analyses. Unlike fundamental analysis, it provides more objective results through mathematical calculations and historical data analysis.
Technical Analysis assumes that prices move in patterns and that similar past conditions may produce similar future reactions. Trends, support-resistance levels, and cyclical patterns are identified on the chart.
Indicators like Moving Averages, RSI, and MACD are calculated from historical data and provide objective signals on the chart.
Tools like trendlines, Fibonacci, support/resistance, and channels help visualize potential entry and exit points.
Candlestick and shape formations can provide signals about the future when interpreted with experience; confirmation with other indicators is recommended.
Fibonacci retracement and extension levels are widely used to identify reversal points; their theoretical background is rooted in mathematics.
Because indicators are calculated using mathematical formulas and produce numerical results, reducing subjective interpretation.
Patterns may require interpretation; they should be confirmed with timeframes, volume, and other indicators.
SMA/EMA, RSI, MACD, and volume indicators are good starting points for most investors.