So you have come across the concepts of prediction and analysis in forex trading? Well, let me tell you, your investment largely depends on the speculations of market movement and currency value. And GBP AUD technical analysis is an important approach that helps in taking these decisions in the forex market, in case GBP and AUD is your currency pairs.
The skill or science of forecasting future movements of currency value with the help of previous data and statistics is called technical analysis.
In technical analysis, a trader speculates about the future of FX market by examining data of past happenings and uses the indicators to understand the current scenario. This gives an accurate idea of what is going to unfold in the coming days.
Contradictory facts about GBP AUD technical analysis:
Not just for Great Britain Pound (GBP) or Australian Dollar (AUD), but if you take any currency pair, truth is historical facts cannot predict future happenings. So, the results are mostly not 100% accurate. Confused?
But when you learn this technical approach properly, your predictions will be close to correct, bringing profitable returns.
Good news for debutants, it is not much troublesome to check previous data as statistics is always available for currency pairs. Considering the complicated situation of the modern economy, technical approach of analysing today is the best method to understand and predict FX market. I know many experienced traders who are earning the maximum profit by proper utilisation of both the fundamental and technical approaches to analysis.
The rules are same even if you consider currency pairs like AUD NZD technical analysis.
Knowing the price chart:
Now, as you will take the technical approach, you would have to deal with price charts. Here is a brief about these charts.
- It is a 2-dimensional chart where horizontal axis shows time, and vertical axis shows price
- Different types of price chart patterns are there such as Candlestick, Line, Bar, etc.
- In these charts, you can find support levels, resistance levels, trends, triangles, pennants and other consolidations, etc. to predict future.
You can also use oscillators and indicators separately for analysing changes in price patterns and trends. Now ask me, what are indicators? Well, these are series of some data points that are calculations based on volume and securities price. These are used for speculating and measuring momentum, volatility, money flow and trends, of course.
Predicting the next movements through GBP AUD technical analysis will help you open or exit a trade in proper positions.
Tips for you: Never overburden yourself with more and more data. Keep things as simple and robust as possible. The more parameters you have in your strategy, the more complicated it will be.
Bringing the entire concept in 3 major points:
We can bring this whole concept of technical analysis in 3 principles.
- Market action: Price is affected by a lot of factors and technical analysis only deals with the actual movement.
- Price movement: In case there is a prominent movement in the market, this approach is used to calculate those patterns further assisting in forecasting.
- Chart patterns: Human behaviour is considered not to have changed in these years. So, previous patterns are an important part of this analysis.
Doesn’t matter you deal with GBP AUD or AUD NZD technical analysis, you must have a clear understanding of the market and analysing methods. Be a pro!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.