Forex chart analysis
On the Forex market there is such a thing as Forex chart analysis. It is the interpretation of
information on the graph which is presented in the form of graphic formations. The main aim is
making a profit.
It should be pointed out, that graphical analysis does not give us a complete answer to the
question of how and what to do. Nowadays for this purpose there are complex theoretical
models. For this reason, automating the location of graphic patterns is a much more voluminous
task and with the help of it are created the very fine line between technical and graphical
So, right tools in the work are very essential. The most of the erroneous primary conclusions
made on the basis of emotions are eliminated by the use of external tools.
Steps of Forex chart analysis
Identification of price extremes. These are the extreme upper and lower dots. They are global
and local (that is, those that are inside global ones). The statistics are collected for a certain
period and are entered in the schedule taking into account different indicators (see above).
The construction of the trend line, which is obtained by connecting two extremums straight.
The top line is the resistance line, and the line passing through the two lower extremes is the
support line. Auxiliary lines connect local extremes and they indicate additional indicators of
Determining the points of possible trend changes is the breaking of technical lines. There are
true and false breakouts, the true - when the trend changes, the false one - returns to the old
channel. True penetration is determined by closing two candles above or below the trend line.
Next a trader just needs the application of figures of technical analysis on the price chart.