5 Ways to Improve Your Technical Analysis Skills

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(Newswire.net — October 23, 2019) — Technical analysis can sometimes be seen as an easier approach to forex trading than fundamental analysis. But, truth be told, there is quite a bit of a learning curve to it.

Many forex traders who are just starting out find it challenging to understand the technicals. And it does take a good amount of practice to build familiarity with the charts. In fact, even intermediate FX traders with some experience still find technical analysis challenging.

But, as with most things, the only solution is to practice, practice, and practice some more. So, to make the learning curve just that little bit easier, here are five ways to improve your technical analysis and forex trading skills.

1. Find Out What Works & Stick To It

Some FX traders jump from one method to another in search of the perfect trading system or approach to technical analysis.

If you want to get good at technical analysis, the key is to find a method that works for you and stick to it until you’re well-versed with the ins and outs of how it works. This will enable you to automatically identify areas where you can improve, and adapt your strategy accordingly.

2. Multi-time Frame or Just a Single Time Frame?

There can be an endless debate on the merits of using a multiple time-frame approach in technical analysis. Some FX traders swear by it, while others are just fine using technical analysis on a single time frame.

What few people realize is that switching from one time frame to another means you might be able to spot something that you would otherwise miss.

Bear in mind that although it’s helpful, this will in no way give you that sought after edge in the markets that we all chase.

The key is to understand whether the time frame(s) you are using complement the technical analysis methods that you are using.

3. Go Back to Basics

You might be using price action techniques or perhaps you’re partial to forex indicators. No matter what methods you employ, it always helps to research deeper into the techniques you are employing.

Some technical analysis methods date back decades. For example, Elliott wave and Andrew’s pitchfork methods have been around for ages. If you happen to use such methods in technical analysis, you can understand how the concepts began and why.

You would be surprised to see how much the technical analysis methods you are using today have changed over the years.

While it can just be a good walk down memory lane, you can also find yourself picking up a trick or two. This will no doubt help you become more confident with technical analysis.

4. Learn What Markets to Work On

Whether it is forex, stock CFDs or commodity CFDs that you are trading, some technical analysis methods are purely designed for a particular market.

Therefore, it makes sense that you first understand the markets that your technical analysis methods were initially designed for.

As an example, simple indicators such as the Advance/Decline or the VIX indicators are primarily suited for the stock markets.

Would it, therefore, make sense for you to use such indicators in the currency markets? Obviously not! Likewise, it always helps to pause and step back to understand what markets the technical analysis methods are designed for.

5. Read & Learn

For many forex traders, technical analysis learning ends with a method that they are comfortable with. But it’s something that evolves on a day to day basis. The only way to improve your technical analysis methods is to ensure that you are up to date.

This could mean having to subscribe to technical trading journals or even purchase some books on technical analysis. My personal recommendation would be John J. Murphy’s book. It’s a great way to start your research and gives great insights into the various technical analysis methods!