Wednesday, February 24, 2010

Technical FOREX Analysis

Decoding Technical FOREX Analysis

Just like their counterparts in the equity markets, technical analysts in the FOREX market analyze price trends. The only real difference between technical FOREX analysis and technical analysis in equities is the time frame. FOREX markets are open 24 hours a day.

Because of this, some forms of technical analysis that factor in time have to be modified so that they can work in the 24-hour FOREX market. Some of the most common forms of technical FOREX analysis are: Elliott Waves, Fibonacci studies, Parabolic SAR, and Pivot points.

A lot of technical analysts combine technical indicators to make more accurate predictions. (The most common tendency is to combine Fibonacci studies with Elliott Waves.) Others prefer to create entire trading systems during the process of technical FOREX analysis in an effort to repeatedly locate similar buying and selling conditions.