Basic Technical Analysis New Traders Should Know

 What is technical analysis in trading?

Technical analysis is a way how to make money trading binary options as well as Forex that foresees the movement of different financial assets. The following are the basic principles of analysis that you must know, especially for novice traders:

1. Price involves everything

In quotes and the current market, the movement has taken into account all trends, participants' moods, and other factors that may affect the recent price formation. In this case, you can not use fundamental analysis.
In the current quotes, the movement has taken into account all the tendencies, the mood of market participants, and also other aspects that can change the development of existing prices. You don't need to apply fundamental analysis.

2. History repeats itself

Dow statistical data shows that market tendencies, in particular changes in peaks (tops) and troughs (bottoms), are quite stable and repeat after a while. This property is used in the mathematical algorithms of technical indicators.

From the picture above, we can see that price trends continue to be present and complement each other. The price does not move randomly and at any time there is a much more cooperative movement: up, down, or within the side range: up, down, or in an oblique. In addition, a person can be identified as "incorporated" in other tendencies:


Here are the long-term tendencies (from a year or more), that open deals for prominent players and hand funds.

- Secondary (months to six months)
Shows bribes and corrections from long trends. This is the majority of market participants.

- Small 
Price movements are fast and multidirectional, from a few minutes to several hours. The most common reason is the publication of fundamental news and statistical data, but the technical analysis does not apply them. During this period, scalpers, binary options signals, intraday traders, and the HFT algorithm work more.

Important points of technical analysis:

  • Its tendency or change needs to be confirmed by volume. Especially in the Forex market where there is no data on the cash volume of open transactions, however, the rule works - the volume should increase both with growth and with a decrease in the market.
  • The trend continues until a reversal signal appears. This is one of the most significant rules - be sure to wait for a reversal when opening the opposite position or closing the current position.
That's the basic technical analysis and important points of technical analysis of trading that you should know.  we remind you that technical analysis and all binary options bots work on historical data - there are no other strategies for predicting movements in the market.

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