5 Benefits of Technical Analysis in Currency Trading

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5 Benefits of Technical Analysis in Currency
Trading
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Index

1. Technical Analysis in Currency Trading
2. 1. Price Movement
3. 2. Easy to Find Trends
4. 3. Less Time Consuming
5. 4. Loads of Informative Data
6. 5. Easy to Identify Patterns in Forex Market

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Technical Analysis in Currency Trading

• Technical analysis in the Forex market involves
  the use of technical indicators and charts to
  predict the price movements of currency.
• Forex traders who use technical analysis in the
  trading have lauded it as a very useful tool in
  currency trading.

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• On the flip side, traders who use the fundamental
  analysis believe that the technical analysis is a
  no go zone.
• Just like there are two surfaces of the coin,
  technical analysis has its benefits as well as
  its limitations.

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• In this PPT, we are going to expand on the
  benefits of technical analysis in the Forex
  Market.

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1. Price Movement

• Technical analysis focuses typically on the
  movement of prices of currency in the market.
• Charts are used to show how prices are moving
  when the prices are trending as well as the
  strength of those trends.

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• Oscillators, momentum and volume indicators give
  a more transparent scenario of the market action.
  
• Using charts, you can obtain the price movements
  details at a glance.

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• Unlike in the fundamental analysis where the
  fundamentalists make use of the economic reports,
  in the technical analysis, this does not apply.
• By analyzing the movement of the prices of
  currencies in the market, a trader can quickly
  make a well-calculated buy or sell decision to
  maximize his margins.

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2. Easy to Find Trends

• Looking at a moving average, for ex, a trader
  can quickly tell whether the price of the
  currency is trending or just stuck in the range.
• Whether the currency is moving up, down or
  sideways, a chart will easily exhibit the trend.

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• Trends are most important to technicians because
  a currency tends to move in the direction of a
  particular trend.
• Using charts, it is easy to establish the trends
  and make an informed and wise decision in your
  trading.

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3. Less Time Consuming

• You do not have to perform the complex
  mathematical operations when you are using
  technical analysis in trading of currencies.
• The Internet has a rich wealth of various
  technical indicators that can be used by the
  trader to make huge profits from the market as
  well as reliable trades.

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• Therefore, Technical analysis is less time
  consuming as compared to the fundamental
  analysis. It is also less tedious and
  cost-effective.

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4. Loads of Informative Data

• Technical indicators and charts provide an array
  of information within the few moments.
• First and foremost, using the technical analysis
  trends can easily be found volatility, momentum
  and trading patterns easily and quickly found.

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• There is a host of indicators in the forex
  market, and each provides information on the
  various aspects of currency movement.
• This information is of paramount importance to
  traders to make the substantial and profitable
  trades.

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5. Easy to Identify Patterns in Forex Market

• Actions in the market tend to unmistakably and
  repeat themselves.
• Using the charts enables a trader whether newbie
  or advanced to find patterns that will help him
  to predict price movements.

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• Like star constellations, patterns in currency
  trading can be complex and complicated, but at
  the time it becomes easier when you master the
  art.
• Some of the patterns that are commonly used in
  the Forex market are rounding tops and bottoms,
  double and triple tops, head and shoulders and
  ascending and descending triangles.

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• These are proven patterns that the currency
  prices usually follow.
• They have powerful predictive powers in the
  market.

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Thank You