Nowadays, the forex market relies tremendously on the technical analysis applied to the fluctuations of the currencies. Many different models for gathering and exhibiting data have been implemented. Taken one at a time or, on the contrary, used in combinations, such models are used when a strategy support or just a strategy in itself is needed as well as when it is necessary to understand the manner in which the forex market got to the point in which it is found now and the direction it may take in the near future. Such an analysis allows confident predictions to emerge, as well as more and more solid investments. Data keep on flowing, gathering in the market, helping with the reinforcement of trends. In order to have a solid understanding of what the forex market represents, it is essential to be aware of trends and this is even more important for an individual who has just started trading forex.
A technical analysis applied to the forex market can be translated into graphs and diagrams. Such a method helps the trader to establish and interpret a so-called pattern. For example, the graph known as the „Candlestick Pattern” presents different stages of the price, namely at the beginning and the end of a period, as well as the fluctuations it had during the course of the intervention. This may offer the possibility to find out the speed in the rise of a certain currency or its falling rate. The forex market can also be analyzed taking into account the Fibonacci figures. This tool is very effective as it predicts with amazing regularity when the forex market is likely to stabilise or, on the contrary, to reverse its trend (the term used by those who trade is „retrace”). This method relies on the analysis of specific points in the fall and the rise of the forex market.
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