Technical analysis is perhaps the most important when trading Forex. Of course, it is important to take into account fundamental factors, but in speculative trading over short time intervals (and in Forex trading is conducted in just this way), it is technical analysis that matters most.
However, approaches to technical analysis can also be different. Some traders use a variety of indicators, oscillators, and other tools that more or less accurately predict the market movement in the future. Others use graphical methods, which makes it possible to obtain more accurate results and often guarantees stable trading. At the same time, it should be borne in mind that graphical methods are quite complex and ambiguous.
On the same chart, using the same lines of support and resistance, each trader can see his own picture, depending on his understanding of the events, experience and technical analysis. As a result, decisions on opening a deal, its direction, density, retention time, and so on may be significantly different.
To get the desired result, you should use: 1. Support and resistance lines, built on the basis of the available schedule. 2. Channels of price movement, demonstrating the range in which prices move in a given period of time. 3. Figures of the continuation and reversal of the trend. At the same time, it is important to take into account how the figure itself, for example, a flag or pennant, is often a continuation trend figure, if the trend is strong enough, whereas with a weak trend it may indicate a reversal of the price direction. 4. Use only well-visualized figures and when they are confirmed by other data. In particular, one should not try to find the “Head-shoulders” figure where it doesn’t exist or where its presence is extremely doubtful. To be sure, you should compare the graphical analysis data, at least with the fundamental factors, and if you trade on small timeframes, then with technical indicators.
Thus, graphical methods of technical analysis can become the basis of a reliable trading system, but you should not forget that technical analysis may not be indicative or mislead you. Therefore, in unclear cases, it is better not to enter the market or use other analysis factors to clarify the situation.