The Main Postulates of Technical Analysis on Forex
The technical analysis on Forex as a whole can be defined as a method of forecasting the price dynamics, based on the observation of the charts for the previous periods of time.
LET US SINGLE OUT THREE BASIC AXIOMS OF TECHNICAL ANALYSIS
The price takes into account all factors
Any factor, such as economic, political or psychological, has already been taken into account and is reflected in the price chart. In other words, changes in demand and supply are reflected in the price movement. If the demand for currency exceeds supply, then it begins to grow, and vice versa – if the supply exceeds demand, it falls.
The main task of technical analysis is to determine the direction of price movement for use in trade.
Hence we can distinguish the following:
a) The current trend always has a desire for development.
b) The current trend moves until it begins its reverse movement.
c) Trade only in the direction of the current trend.
History repeats itself
It is based on the assumption of the constant psychology of the crowd. If some time ago the situation developed in a certain way, then there is no reason to believe that under the same initial conditions, market participants will act differently.