[FXG]

Technical analysis predominantly uses charts to forecast future price movements. Nowadays it is not necessary to draw charts on paper as the process is automated by specially designed computer programs, like MetaTrader4.

There are three sources for the technical analysis: price, volume and open interest (only for the future contracts).

Principles of technical analysis are the following:

* Price discounts everything. Price is affected by economic, political and other factors, and all information is already reflected in it. Technical analysis utilizes the information captured by the price to interpret what the market is saying with the purpose of forming a view on the future.

* Price movements are not totally random, or prices trend. The main purpose of the charts is to define a trend at an early stage and to trade in accordance with its direction.

* History repeats itself. The techniques which were effective in the past can be still effective to forecast future price movements.