FX Market_1. Analyzing the Forex Market

Lesson 1: Analyzing the Forex Market Supply and demand are the two factors that move the market. They are the key forces responsible for each market happening and any market around the globe relies on them. Supply and demand are crucial to the bulls and the bears, along with the open positions they have. In this chapter, we will be covering methods and strategies which both share the same thing – they all try to gauge supply and demand. A few of them could be on point, but will fall behind price, while others such as economic theories applied in fundamental analysis, won’t be highly accurate. Technical Instruments One significant aspect of technical analysis is that it is chart-bound. Based on Charles Dow’s theory, the practice of analyzing charts stemmed from the reason that the market lowers prices on everything. In simple terms, Dow claimed that whatever affects supply and demand will certainly reflect in the price – which can be seen instantly on charts. This brief description also underlines the technical analysis’ core limitation – its analyses which have already been included by the market. The more important question to ask here is how you will be able to keep up if what you know is common knowledge?