Technical trading refers to trading using technical analysis techniques and tools (Trend following indicators, stochastic oscillators, Elliot waves, Fibonacci...)
The theory behind technical analysis is that historical prices and volume can be used to predict future price movements in a stock or an asset. Technical analysts or chartists believe that history can repeat itself and that technical trading can be used to detect these patterns and trade them profitably.
Technical trading is very popular and is widely used by traders for several reasons. One of these reasons is that technical trading does not require a lot of data, unlike fundamental trading.
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
