1. Market action discounts everything! This means that the actual price is a reflection of everything that
is known to the market that could affect it, for example, supply and demand, political factors and market
sentiment. However, the pure technical analyst is only concerned with price movements, not with the
reasons for any changes.
2. Prices move in trends Technical analysis is used to identify patterns of market behavior that have long
been recognized as significant. For many given patterns there is a high probability that they will produce
the expected results. Also, there are recognized patterns that repeat themselves on a consistent basis.
3. History repeats itself Forex chart patterns have been recognized and categorized for over 100 years
and the manner in which many patterns are repeated leads to the conclusion that human psychology
changes little over time.
is known to the market that could affect it, for example, supply and demand, political factors and market
sentiment. However, the pure technical analyst is only concerned with price movements, not with the
reasons for any changes.
2. Prices move in trends Technical analysis is used to identify patterns of market behavior that have long
been recognized as significant. For many given patterns there is a high probability that they will produce
the expected results. Also, there are recognized patterns that repeat themselves on a consistent basis.
3. History repeats itself Forex chart patterns have been recognized and categorized for over 100 years
and the manner in which many patterns are repeated leads to the conclusion that human psychology
changes little over time.
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