forgot password

What Is Technical Analysis?

Technical analysis is the use of charts showing historical market data to forecast market trends and predict price movements. Technical information is displayed in graphical charts, updated in real time, which helps the technical trader predict when to buy or sell a given instrument. The trading information presented in financial charts, such as instrument prices, and trading volume, provides the basis for any technical trading strategy. 

The Primary Technical Analysis Tools

Technical analysis tools reflect patterns and trends in price movements. To evaluate trends, technical traders look at indicators such as Bollinger Bands®, Fibonacci numbers, moving averages etc.  Below is a list of some of the major technical analysis tools.



 Number theory 



The Basic Principals of Technical Analysis

Dow Theory, based on principles outlined by Charles Dow, the first editor of the Wall Street Journal, serves as the basis for technical analysis. The theory is founded on three central tenets:

Firstly, price movements are of primary importance. All major market forces are reflected in the price of an instrument. Every market shaping factor, such as political events, market sentiment, or supply and demand is reflected in the changing value of the instrument.

Secondly, prices move according to trends, which allow the technical trader to anticipate future market behaviour.

Finally, price movements are cyclic and historical patterns repeat themselves. Technical traders can identify the repetitive behavioural patterns of market participants reflected in financial charts.

The Benefits of Technical Analysis

 Technical analysis requires minimal data to provide valuable trading insights. Volume and price can provide the technical trader with all they need to make an informed trading decision.

 An experienced technical analyst can follow multiple markets and instruments simultaneously.

 Since the primary focus of technical analysis is the identification of trend reversals the question of when to open a trade is clear and straightforward.

 Used in conjunction with fundamental analysis, technical analysis tools such as trends, charts and mathematical indicators can offer a panoramic view of the market and lead to a highly effective trading strategy.


Risk Warning: Forex and CFDs are leveraged products. Forex and CFD Trading is highly speculative and carries a high level of risk that may not be suitable for all type of investors. You may go to Risk Warning Page for detailed information. Trading on margin and leveraged products increase your exposure to risk. You may potentially lose some or all of your investment.

Disclaimer: Any information contained above is provided for general information purposes only and does not constitute and shall not be deemed to constitute advice or an offer or solicitation. Such information and any opinion expressed therein reflects and represents the views of Domino Europe Ltd at the time of writing and, accordingly, may be subject to change without notice and cannot be relied on to any extent by any person seeking to execute any transaction or as a basis for any investment decision. Such information has been prepared without regard to the specific investment objectives, financial situation and requirements of any particular person. Whilst we believe that the information contained herein was accurate at the time of writing, we do not guarantee such accuracy or, for that matter, completeness in addition, we do not assume any liability for any direct, indirect or consequential loss that may result from the use by any person of any such information contained herein. Translations of the Website/Agreement and /or any other documents pertaining to the Services are made available by Domino Fore Ltd for the customer’s convenience. In the event of any conflict and/ or discrepancy whatsoever between the original English text and any translation thereof, and for any international purposes, the English version shall prevail.

Domino Forex is the trade name of Domino Europe Ltd. A limited Liability Company registered in Malta C59946 and licenced under the MFSA Category 3 Investment Services Licence Number IS/59946
Apartment 12, Regent House, Bisazza Street Sliema SLM 1640 MALTA
Phone: +356 274 00 577-8     Fax: +356 274 00 579     E-mail:

Copyright @ 2015 Domino Europe LTD | All rights reserved