Understanding & History of Technical Analysis
Basics of understanding technical analysis
- Know the pattern of price movements and characteristics of a currency.
- Support and Resistance Levels
- Diversion / Convergence
- Candlestick Chart
History of Technical Analysis
Technical analysis was first used for agricultural trade in Europe in the early 16th century. Whereas in America, it was only at the end of the 18th century or rather in 1882, Charles Dow and Edward Jones and Charles Bergstresser founded Dow Jones & CO.
Dow then poured out its acknowledged and valued ideas as the basic foundation for current technical analysis by writing the Editorial series in the largest daily newspaper in the world at the time, which was also owned by Dow Jones & CO, the wall street journal. The world finally came to know the theory with the name Dow Theory. Charles Dow himself never officially launched the book as a result of his writings other than in his newspaper editorial.
The Dow Jones & CO company was then also listed as one of the public companies in the NEW YORK Stock Exchange with a stock symbol: DJ. In 20017 Dow Jones & CO was acquired by News Corporation owned by the Rupert Murdoch conglomerate which was listed as the 33rd richest person in America in 2007 (Forbes).
Tips For traders who use Technical Analysis
Technical analysis assumes that fundamental analysis is too varied and its use is difficult to calculate. In addition, news information is only a cause and not as a determinant of the direction of price movements.
The main purpose of observing a chart is:
- As soon as possible determine the trend of price movements.
- Estimates the possible time and distance of the trend.
- Choose the most profitable time to enter and exit the market.
We will learn more about technical analysis later. Important news we can see on the sites of providers of economic calendar such as Forexfactory etc.