Friday, July 16, 2010

What is the best analysis?

I believe that every chart deserves its own analysis. Moreover, I think stock charts highly differs from forex charts.

How to find out what technical analysis will be the best for your chart?

I think it's a matter of practice. Open your chart and begin checking all your theories on historical prices. That's what big guys do. The more time you spend looking at the chart, the more money you could make out of it. Maybe you should print some daily graphs, lay on your sofa and read them thoroughly.

Pay attention to people who mostly trade on your chart. I suppose that japanese more often use candlestick analysis and englishmen prefer regular technical analysis. It could affect Usd/Jpy charts and Gbp/Usd charts accordingly.

Imagine that all japanese are looking at the specific chart and see precise reversal candlestick pattern. Then assume that they all believe that it's the most important indicator that means the reverse of the current trend. Will anybody try to trade against the pattern? I don't think so and rate most likely reverse. With this example I'm trying to say, that you need to know people with whom you are trading with.

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