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Is Tech Trading Crap - Are the Charts Just Bull?

May 22, 2008
For someone who hasn't spent a great deal of time trading in the Forex, the charts and all the hundreds of different claims about news breakout systems can be really confusing. Some of the claims can seem outright ridiculous at times.

If profit was guaranteed, why would anyone do or use anything else? With all these systems it's easy to wonder: is tech trading crap - or do all those charts really mean something?

This question can be even more confusing for some people when they realize there are Forex traders who believe in fundamental analysis of the market, basically looking at the larger economic picture to determine which currencies to bet on and bet against. This is okay as a long run deal, but the Forex is volatile, so it would make sense that there is a quicker way to analyze a constantly moving markets.

So is tech trading crap? The answer is no, though with an asterisk. Good technical trading is necessary to be able to figure out which currencies are overvalued and which are undervalued. Knowing this information will make it much easier to locate where your entries and exits should be, and gives you a much better chance of being profitable with any given currency pair.

On the other hand, tech trading can get into trouble when it only follows charts and ignores the economic reports that come out. If an economic report spells trouble, that currency is going to fall no matter what previous chart analysis said. Without paying attention to the economic reports and other similar indicators, technical analysis falls into pitfalls that can badly hurt your account.

You don't need an astrologer to read the stars and tell you it's going to flood. If it gets cloudy and starts to rain, head for the high ground. Yet if you only go with fundamental factors, you can end up taking a huge hit on the Forex before the currency actually rallies - and by that time you might even have your position closed.

Technical analysis is an extremely useful tool - if it wasn't then nobody would actually use it. That being said, like with so many things, balance comes into play here. If you use technical analysis in a wise balance with fundamental analysis then you can expect the best results and you will end up as a very happy trader!

Remember these tips, and you're trading in the Forex is much more likely to be successful.
About the Author
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder - Founder, ForexImpact.com
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