Technical analysis tries to forecast the market by analyzing the past performance of a currency. All the positions are entered based on a mathematical pattern of historical prices. There are hundreds of different types of these technical indicators that traders use to predict the future of the market. Forex moves in very technical patterns and the trades are very short—sometimes less than a minute. That’s why forex is considered the best market for a technical trader.

A technical trader assumes that:
Prices move in patterns and
History repeats itself

Therefore all his/her analysis is based on trying to interpret charts, recognize patterns and find trends.

As said earlier, forex moves in a very technical pattern, but there is much more to it than just that, and in order to be a successful trader fundamental analysis need to be consulted too. Read developing a forex trading system to see how these two types of analysis are intertwined.

Continue on price charts.