One of the founding pioneers of technical analysis is Charles Henry Dow. He co-founded the Wall Street Journal with Edward D. Jones. He invented the Dow Jones index, the world’s oldest stock market index, to protect the economy’s future progress. Even though the financial markets have evolved significantly, Charles Dow’s theory remains applicable today.
Volume Spread Analysis (VSA) by Richard Demille Wyckoff
Tom Williams later improved on Richard Demille Wyckoff’s method of comparing prices in proportion to volume. VSA is an analytical technique based on experienced traders’ trades that reveals why and when they position themselves in the markets.
At the end of the 1930s, Ralph Nelson Elliott (1871-1948) published the “Wave Principle”, having been inspired by Dow’s theory and Italian mathematician Fibonacci’s golden number. Elliott believes that the markets don’t evolve randomly, but instead follow repeated trend cycles (up or down) that are influenced by nature and human behavior.
This forex trading strategy is effective because it allows you to profit regardless of market direction. Even if the market reverses directions, your hedge will protect you (and create money!) by detecting trending markets.
Correlations can be utilized to avoid disastrous trades such as a false break, as well as to corroborate a trade or an analysis. The objective is to examine if currency pairs with a positive correlation are moving in the same direction as the one you’re interested in.
The Commitment of Traders approach is predicated on major institutional traders disclosing their long and short holdings in a weekly report. It is beneficial since it aids in determining when a market reversal is imminent.
The NFP (non-farm payroll) is a key economic indicator that causes a lot of volatility in the currency market. Traders must be wary since professionals (market makers) influence the market to find their customer’s stops during these announcements.
Simulator programme for FX trading. It allows you to develop and test trading strategies based on technical analysis utilizing historical data spanning years. This is an excellent tool for establishing a trading strategy quickly and effectively. Advanced users can develop their signs and procedures thanks to open interfaces.