Forex Technical Analysis: Using forex historical data to determine the forex trend.

This page describes how I use forex technical analysis, forex trends and forex indicators for successful forex swing trading.

To use my method of forex technical analysis correctly, you need a real time forex chart (preferably candlestick charts), to correctly identify and chart forex signal trend. I use this method very successfully with my own forex internet trading.

Forex Trend

Forex trends are what I consider to be the singularly most important factor to consider when using technical analysis. To determine the trend, ask yourself “is the market going up or down?” You do this by looking at a daily chart first. If the market looks to you like it’s going upwards, look back into the forex historical data on that chart and find the lowest low. Then draw a trendline from the bottom of the lowest low up to the highest high.

If the market looks like it’s going down, look back and locate the highest high and draw a line from the top of the highest high to the top of the lowest low.

Once you’ve noted the trend on the daily chart, it’s time to open an hourly chart and see the most recent price movements (I suppose is the best way to describe it is “the trend within the trend”).

Once you have determined your trend, it’s time to use support and resistance lines to mark out the highs and lows within the trend. A support line “supports” the market – ie, it’s the point where the market comes down and bounces up again. A resistance line “resists” the market – ie, the market comes up and hits the line and bounces back down again.

The market is always moving, it swings up and down in ripples within a trend. I think this is what makes trading so fun – the volatility.

After you have your trend line and support and resistance lines, see if there are any points where those lines intersect. This is the area you need to watch to see if the market comes back and bounces off that point.

The next step is optional…

Fibonacci sequence - Locate the most recent bounce points and draw Fibonacci retracement lines between them.

Next step of this forex technical analysis: Now wait for a candlestick pattern to emerge – being patient and watchful is essential for successful forex internet trading.Candlestick patterns come in bullish and bearish varieties. If your trend is going upwards (ie bullish), you need to look out for a bullish candlestick pattern in your area of interest (where your trend line, support lines and Fibonacci lines intersect). If your trend is going downwards, look out for bearish candlestick patterns.

Then place your trade!

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