When it comes to technical analysis the main thing that you need to remember is that you should not disregard it as a hoax because in forex trading it is actually a vital trading tool because of the fact that forex markets are blind. Basically these markets are blind because you cannot see the order size, which translates into the fact that you cannot see where the buying and selling is coming from. And because you cannot see where things are actually coming from in this market technical analysis is one of the best tools that you can use to help you make an educated decision in forex trading. But keep in mind that when you are going to be taking advantage of technical analysis, which covers price action support and resistance, you need to keep in mind that pretty much all technical indicators are lagging events. What this means is that they are simply there to give you information on an event that has already occurred rather than real time events. But we hope to accomplish two things through technical analysis:

• Understand what the broader investing public is thinking
• Find reliable indicators that not only show us what has transpired, but also gives us some insight to what could take place in the future

Another important thing to keep in mind when it comes to price action support and resistance with forex trading is that all of these can have their own indicators to help you earn a profit in forex trading. But all three are also a part of the technical analysis, even though they are all a very basic form of technical analysis. But the thing is that these simple and basic tools can actually be very helpful for forex traders, in fact they can be extremely effective for dexterous traders. And the thing that you want to keep in mind the most is that sometimes the best course of action is to choose to keep things as simple as possible.

Some of the most basic analyses that you will need to learn about when it comes to forex trading are price action, support and resistance analyses. You will need to have a basic understanding of how these analyses work and how they can help you in forex trading so that you can earn a profit in forex trading.

Here are some things that you need to know about price action:

-The forex price action trader will not use any indicators; instead they will just study the price on their trading charts to decide on the next line of action.

-The forex price action trading is often described as no frills trading, meaning it is just simple old regular trading. The reason for this is that in this type of trading there are no technical indicators that are being used. This includes Bollinger bands, relative strength index, moving average convergence divergence (MACD) or any other related indicators that are on their price charts that they use to trade.

-In price action analysis a forex price action trader can use a single vertical price bar or a cluster of price bars in their analysis.

• In a single price bar analysis, for a bearish condition, the trader is going to be looking for a close that has closed below the open or midrange of that particular bar.
• Once they have determined this, the trader has a good understanding that the next vertical price bar will more than likely take out the low, or at least the low of the bearish vertical price bar under analysis.
• The bearishness is reinforced if the bearish vertical price bar has a close that has closed in the lower quarter of the vertical price bar under analysis.
• In a dual price bar analysis, the reliability of the bearish formation can be further reinforced if the vertical price bar can make a lower high and a lower low while closing below the open, the midrange and is also able to close below the previous vertical bar's close.
• When this happens you will know that the bears have won the trading day and that most likely the day's trading action to be down is increased. What this means is that the chances of the next day going lower or at least testing it is very likely.

-This information is very knowledgably to a forex day trader because it affects how they can trade the following day.

• o For example, if the market opens up the next day and gives you a few pips, the forex day trader can sell the market, as long as everything remains normal. The trader can also expect the market to fall back down or at least fill the opening gap and then back to the previous vertical bar's close and to test the low of the vertical price bar as well.

-Vertical bar analysis has been used in trading systems with further refined techniques so that a complete price action trading methodology that returns consistent profits is the end result.

-This method is used when the trader cannot afford the time to consider too many trading indicators during trading. So what they do is use the price action analysis as a powerful tool that can help them to earn a consistent profit in forex trading.

Here are some things that you need to know about support and resistance.

• These are important concepts that are commonly used when trading online
• In a forex bar chart you will see the details of the price movements across a time period. You will also notice that the chart moves inside a certain border that can be framed. This frame constitutes the support and resistance levels.
• Support levels are horizontal lines that define the price at which most traders feel the prices will move higher

1. You can pinpoint support levels by viewing the day's lowest prices
2. These usually fluctuate around a certain point, which is where the support level is located

• Resistance levels are horizontal lines that define the upper level of trading

1. This is the place where there are more sellers than buyers
2. The reason for this is that when the currency reaches the resistance level it is expected to drop

• If support levels are broken they often become the new resistance levels because of the fact that the currency fails to reach its precious lowest level
• If resistance levels are broken they sometimes continue to raise high above the previous resistance level.

• A common strategy for forex trading uses Forex support and resistance levels to set the placement of stop loss and take profit limits.
• It is relatively easy to draw support and resistance lines based on the highs and lows of the lateral trend because the chart visually shows you were the highs and lows are

1. In fact there is actual no need for math when it comes to drawing the support and resistance lines, unless you are applying some sort of quant related system

• Support and resistance are actually visual indications of market psychology
• Through support and resistance you can see where the market may become jittery upon either rising or falling
• If the trader was attempting to find as longer term hold they would have sought a break above or below support and resistance before taking positions
• If they were attempting to find a shorter term hold they would have most likely used the support and resistance lines as contrarian indicators
• If you are using support and resistance for stops your orders should be placed slightly below or above support and resistance, respectively

1. The reason for this is that it is important to force the pair to actually breach support and resistance before closing positions because otherwise we run the risk of being unnecessarily stopped out of our positions.

• If a long term trader uses support and resistance as contrarian indicators they might discover that they will have a more difficult time finding profitable set ups, especially if the stock is traveling laterally in a channel or consolidating in a wedge.
• When a pair briefly breaks above resistance, just slightly this is known as a "head fake." And you want to avoid this at all costs, in order to avoid this you can do one of two things or even both:

1. Place stops at a level outside of support, or resistance, at a point large where we won't be devastated if our stops are hit
2. The stop should be at a level far enough outside of support, or resistance that will keep us from falling victim to a head fake, should the pair make a quick move outside support, or resistance and then retrace itself. One way of doing this not closing our position unless the chart-bar (4-hour in this case) closes outside of support, or resistance.