Basics

Understand all about Technical Analysis


We have already discussed what is fundamental analysis, relating to the financial market movements with real factors that affect the economy. Technical Analysis is the other common trading tool for analyzing present and historical market prices, in order to gauge potential future rates.

According to the efficient market hypothesis, the price of an asset such as a forex pair contains all the information known to the market up until the present moment, including any consensus expectations about its future price direction.

Technical Analysis encompasses the art of charting historical prices on a y/x graph, where the horizontal x plane is the time series, and the vertical y axis are the price levels of the asset.

By looking at the price of an asset plotted over time, there are many forms of the graphical analyses that can be made to gauge future price trajectories.

Forex is a popular market for applying technical analysis, due to the volume of trading that takes place each day, and the various time series of prices available to analyze, ranging from 1 minute, to daily and even monthly charts.

Example popular time frame for technical analysis in forex include:

forex the best timeframe

In addition to time-frame, there are also many different chart types available, from a simple line chart, to more complex candlestick charts which convey more information for each time interval.

forex charts

No matter which chart type and time series you use, technical analysis enables you to choose from a multitude of potential indicators and studies which can be added to analyze your chart further. The goal of using indicators when performing technical analysis is to predict forex market movements.

There are simple indicators like the median average or weighted average price, to more complex indicators, such as Ichimoku or Regression Analysis. Many traders base their forex trading decision-making process using these types of indicators and analysis tool.

Some of the most popular chart patterns in forex trading.

 

forex trading charts

Recognizing patterns: Support & Resistance

While market prices may appear random or chaotic to the untrained observer, there is a symmetry that can be found when analyzing forex prices using technical analysis. And while these patterns, known as trends, can vary across time-frames, they look similar and are normally described as support or as resistance levels.

  • Support: a horizontal or diagonal line drawn on a chart which coincides with a level where the price of the underlying asset was supported by buyers.
  • Resistance: a horizontal or diagonal line drawn on a chart which coincides with a level where the prices of the underlying asset was resisted by sellers.
forex trading support

The same pattern observed in daily movements can be shown in tick-data or five-minute trends.

Of course, movements on such time-scales are very rapid, so it is harder to fill the information and send a market order, when trading in very short time frames.

Sometimes, when the time is very small, it is only possible to trade using machine assistance, such as forex trading algorithms.

Therefore, trades supported by Artificial Intelligence (AI) make use of technical analysis, because most of the algorithms will follow price patterns and ignore news about the outside economic world. This is possible because technical analysis focuses solely on price.

From among the portals that use automated trading based in AI, Wiseinvest has an easy-to-use platform interface.

The best way to trade forex

There are two ways to invest with our AI in forex:

1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.

 

automated trading with ai bot

Don’t you have a broker account yet? Our AI is integrated to trade automated with the broker Oanda. Click here to open an account.

With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account and you can monitor the AI trading performance directly on our dashboard.

2. Manually with AI-Signals.

Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5 and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.

There are five unique variables for each AI signal, and each must be copied exactly, in order to match the performance of the signal as close as possible.

Each AI signal alert consists of the following five data points:

  • Symbol (forex pair)
  • Direction (long or short)
  • Position size (number of units or lots)
  • Take profit (price level to exit with maximum gain)
  • Stop loss (price level to exit with maximum loss)

You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a Professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.

When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate or change the leverage in your forex broker account. Learn more about leverage in forex trading clicking here.

Wise AI forex signals website dashboard:

forex trading signals

While technical analysis is very popular, it can also be time-consuming and thus using AI helps Wiseinvest customers save time, to complement their decision-making process when it comes to forex trading. If you want to do this kind of trade analysis, but don’t have the time, Wiseinvest is the best option for you.

Wiseinvest is dedicated to provide you with the educational and informational content necessary to make the right calls in the forex market.

Even if you have the time and technical skills, Wise automated AI trading and AI forex Signals can help complement your trading and help you diversify your forex portfolio. You simply copy and paste the real-time trading signals in your brokerage account at major brokers like FXCM.com.

Takeaways 

  • Technical analysis is purely based on prices. We do not consider news such as the production of goods, services, which are considered fundamental analysis. Only the price of assets (i.e., forex pairs) are charted across various time-frames.
  • If you want to practice technical analysis, you must be well informed, with a broad source of information and viewpoints.
  • If you do not have the time or the skills to perform technical analysis, Wise AI Trading and AI forex signals can help you find some of the best market opportunities each week.

The professional team at Wiseinvest can provide you with the best forex content to help you succeed!

Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.

The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.