Forex Profit Accelerator

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Technical Analysis: In my last articles, I shared
that for any Forex trading method to be considered,
it must be first, a complete method (insert link to
previous article) and second, it must teach specific
risk management rules. Today's article on how to find
the right trading method for Forex trading revolves
around Technical Analysis. I believe the best Forex
trading methods are based on technical analysis,
without being 100% mechanical or automated.



As you already are aware, there are two primary
forces acting in the Forex markets: fundamental
data, which include such indicators as balance
of trade data, money supply, interest rates,
economic and financial reports, etc.; and technical
data, which include such indicators as moving
averages, average directional movement, stochastics,
etc.

So, why should a forex trading method be focused on
technical indicators?

First, attempting to trade on fundamental data
requires you to be available on a real-time bases
at whatever hour of the day or night that the news
impacts the markets, and, you must be able to act
on that news before (predictive) or at the instant
thousands of other forex traders do (reactive),
otherwise, you will have missed your opportunity.

Trading on fundamentals, as well, is less about
the actual data itself and more about the market's
reaction to that data.

Technical analysis, however, allows the trader
more time to make a smart decision. Utilizing
technical indicators means the fundamentals are
already reflected in the price of the market at
any given instant.
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While this means you are working more often with
slightly lagging indicators, the advantages to
using a forex trading method based on technical
analysis mean that you spend less time identifying
potential trades and when you have identified a
trend and look to enter a trade, you have much
more data to support the trend's existence than
if you are simply trading on the 'news'.

Furthermore, by using technical analysis and
applying it through a trading method, you can trade
the markets on your own terms, when you want to trade
and how you want to trade them, without needing to
grasp the minute details of what fundamental reports
'really' mean.
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