Free Articles  >>  Business And Finance >>  Page 1905  >> 

Technical Analysis Colors on the Canvas of Fundamental Analysis Forex Trading

Fundamental Analysis is the canvas and Technical Analysis is the colors on it. Trade with the combination and you can have the beautiful painting or shall we say a healthy bank account?

Market moves because of Fundamental factors, Psychological aspects and sentiments. For short term trading the later two i.e. psychology and sentiments play a big role. Short term trading is not just the fundamental analysis but the analysis of how various trading floors are thinking and behaving. Technical indicators help us analyzing the market-mood by analyzing how the market is moving. Technical indicators also become very important as the traders on the big trading floors also make their trading decisions based on the same indicators. But then when everyone is following more or less the same technical indicators for trading decisions then everyone should be making money? Well, the indicator would show a different picture if you are using a 30-minute chart or a daily chart. The skills lie in comparing different charts of different periods and then making your analysis.

Technical indicators in Technical Analysis help us in analyzing the following:

1) Trend of the market: Whether there is an uptrend or downtrend or whether the market is moving sideways or without a trend.

2) If market has a trend then whether the trend is strong and hence offer us the opportunity to enter the market in the direction of its movement? What it means is if there is a uptrend which is strong then we can still buy but if there is an uptrend but it’s getting weaker then the market direction may reverse.

3) If the market is running sideways or in range then at what point we should buy and at what point we should sell or short-sell.

Technical analysis is broken into two main categories:

a)Chart patterns/trend lines (visual)

b)Indicators (mathematical)

An over view of some important Technical Indicators:

SAR (Stop and Reversal):

•To determine whether a trend is ending and/or a new trend may start.

Bollinger Bands:

•To measure market’s volatility.

•To Give buying /selling signals during non-trending /sideways market.

•To Have an idea when the market may enter into a trend while running sideways.


•To identify a new trend


•To identify where a trend might be ending and/or a new trend may start (indicating over bought/oversold levels).


•To identify whether a trend might be ending and/or a new trend may start (over bought /over sold levels).
•RSI also can be used to confirm trend formations.

Moving Average:

•To know resistance and support in sideways market.

•To identify trend reversal


•To know the strength of the trend


•To know the probable support and resistance levels.

There are a very large number of technical indicators available but it is always better to keep it simple and user a combination of some few indicators depending on the applicability as mentioned above. Using a wide variety of technical indicators only creates confusion and results in less chances of success.
About Author Himanshu Jain :

Himanshu Jain is a Forex Trader and also runs <a href="" target="_blank"></a>. By qualification a graduate mechanical engineer, with over 20 years of diversified international experience. The Involvement with Forex Trading started in the year 2000 and over the years it became the main work and direction.

Article Source:
Article Url:

Article Added on Friday, July 8, 2011
Other Articles by Himanshu Jain

Forex Trading The Way to Succeed Understanding the Trading Psychology and Trading Discipline
Trading in Forex and Stock markets is not only about the knowledge and understanding of the fundamentals or technicals. Trading is an art in itself. Even with a great knowledge and understanding of the market, you may find yourself continuously losing in your trades. You may know that the market will go up and you buy. Instead of going up the market starts moving down your stop-loss order closes your trade. The next minute you see that the market starts moving up, the way you had analyzed. You...

Forex Trading Currency Correlation How to Use It
Currencies are priced in pairs, no single pair trades completely independently of the others. This makes the understanding of correlation very important. For example, currency pair A moves in the same direction as pair B and we have been following up pair A's move very closely. We expect it to go up and we buy. We have not been following up pair B so closely and suddenly we look into that and the fundamentals or technical analysis suggests us that this pair may go down. We short sell. What...

Publishers / Webmasters
Article ID: 305286
DELINK URL from Authors Bio
REMOVE Article
Tell A Friend
Leave A Comment!
Download this article in PDF
Report Article!
Search through all the articles:

180 Users Online!!
Related Articles:
Latest Articles:
Business And Finance >> Top 50 Articles on Business And Finance
Category - >
Advertising Advice Affiliate Programs Automobiles
Be Your Own Mentor Careers Communication Consumers
CopyWriting Crime Domain Names DoT com Entrepreneur Corner
Ebooks Ecommerce Education Email
Entertainment Environment Family Finance And Business
Food & Drink Gardening Health & Fitness Hobbies
Home Business Home Improvement Humour House Holds
Internet And Computers Kiddos and Teens Legal Matters Mail Order
Management Marketing Marriage MetaPhysical
Motivational MultiMedia Multi Level Marketing NewsLetters
Pets Psychology Religion Parenting
Politics Sales Science Search Engine Optimization
Site Promotion Sports Technology Travel
Web Development Web Hosting WeightLoss Women's Corner
Writing Miscellaneous Articles Real Estate Arts And Crafts

Disclaimer: The information presented and opinions expressed in the articles are those of the authors
and do not necessarily represent the views of and/or its owners.

Copyright © AwareINDIA. All rights reserved || Privacy Policy || Terms Of Use || Author Guidelines || Free Articles
FAQs Link To Us || Submit An Article || Free Downloads|| Contact Us || Site Map  || Advertise with Us ||
Click here for Special webhosting packages for visitors of this website only!
Vastu Shastra

Shared Linux Hosting Provided By AwareIndia

Company IDS