Technical analysis does not consider the reasons why the price changes its direction, but only takes into account the fact that the price is already moving in a certain direction.
3 axioms of technical analysis in the FX market
1
Price movements in the market take into account all the information
According to this axiom, all information affecting the price of a product has already been taken into account in the price and volume of trading, and there is no need to separately study the dependence of the price on political, economic and other factors.
2
Price movement driven by trends
Prices change not just randomly, but at the same time follow some trends. That is, time series of prices can be divided into intervals in which price changes in certain directions prevail.
3
History repeats itself
It makes sense to use graphical models of price changes developed on the basis of historical data analysis, since price changes reflect a fairly stable psychology of the market crowd - participants react to similar situations in a similar way. It is known that the price in many cases rises relatively smoothly, and falls irregularly.
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