Technical analysis is vital for forex trading, even though if your strategy has fundamental elements to it and you have a view of which direction it might go from this analysis you still need to find the optimum entry point for your trade, and the only way to do this is using technical tools.
Developing Your Forex Trading Skills.
Forex trading is all about developing chart reading skills, learning what the candles on the charts and the different levels imply, this is what price action trading is. The temptation with forex is to always overcomplicate things, whereas it is much better especially at the start of your forex journey to keep things as simple as possible. If you are interested in identifying certain patterns, choose one pattern first and then practice trading that before you move on to trading other patterns. There is no big secret to forex trading, but if there is, it’s about keeping things as clear and as simple as possible, a difficult chart is a poor chart, and you don’t make money by trying to be clever trading the tricky charts, you are simply making things harder for yourself and taking unnecessary risks. The profitable trader is a patient trader, he might wait days or weeks for a trading opportunity, but only then when there is clarity in the market will he trade.
Forex Candlestick Trading.
The cornerstone of your forex trading skills should consist of candlestick charting, candlesticks are indicators in themselves, they indicate how the price has behaved during a fixed period of time of your choosing. The skill that you need to develop here is is to identify where to take a reversal candle and when not to, a simple example would be is that is if you had a candle reversal pattern in the middle of a trend it isn’t valid, you need to learn where the candlestick setups are valid and where they are not. Focus on the longer term support and resistance, wherever the price has been held before there is a higher chance that it will be held around that same area again, learn how to identify these on the daily timeframe, this is the key to trading in the shorter term, it’s taking the long term view, it gives you the bigger picture. Make sure if you don’t learn any other pattern you learn the head and shoulders formation, it is a key way to identifying where a market will reverse and you will see it appear time and time again. There are many other patterns that appear, but always get the handle on one specific pattern at a time otherwise it will confuse you, always keep things as straightforward as possible until you have a skill ingrained in your mind, that is how you will succeed.