How to Use Forex Technical Analysis Properly

[Roksana]

There are a lot of different aspects to forex technical analysis. It is not my intention to give advice on which technical patterns or indicators are better than others, but more to share with you some of the observations. In addition to this, we will look into testing trading systems based mainly on technical analysis.

First of all, it is important to understand that there is no magic to forex technical analysis, although it is often marketed in such a way. Technical analysis works only because it is similar to that of a self- fulfilling prophecy, and (in my opinion) nothing else. When this is taken into consideration, it only makes sense to use the most known ones and stay away from all the so-called "secrets" or new technical indicators, as an unknown technical indicator simply will not respond well to a self-fulfilling prophecy. A simple way to test the popularity is to do a search on Google for the name and look at the results.