Technical Analysis
This type of analysis is based on the assumption that the trend of the exchange rate is already incorporated in the history of their past fluctuations. The basis of such an assumption is that, fist of all, any complex object (market is a very complex object) is inertial, and secondly, the history tends to repeat. A trader, using technical analysis, builds charts of currency rates, finds trend lines on those charts, determines the shape of a trend reversal and calculates various mathematical indicators, on the basis of which makes the decision to open a long or short position.
Certainly it is important to understand that the concrete prediction is impossible, because the factors affecting the currency rates are physiological, political, economic, and so on. There is no any physical law that affects the market, based on which analytics could make 100% predictions.
Technical analysis is based on the time series of the sequence of currency pairs prices, each point of which is a relatively short period of time- time frame. In fact, the time frames are the following: 1 minute, 5 minutes, 15, 30, 60, 1 day, 1 week and 1 month. These numeric price series are analyzed by mathematical methods or evaluated by traders visually from the graphs.
