5 Ways to Improve Your Technical Analysis Skills

Technical analysis can sometimes be seen as a simpler approach to forex trading than fundamental analysis.

But, to be honest, it does come with a bit of a learning curve.

Many forex traders who are just starting out find it difficult to understand technical analysis. And it takes a lot of practice to get familiar with the charts.

Even advanced forex traders with some experience still find technical analysis difficult.

But as with most things, the only solution is to practice, practice and practice some more.

To make the learning curve a little easier, here are five ways to improve your technical analysis and forex trading skills.

1. Find out what works and stick with it

Some forex traders jump from one method to another in search of the perfect trading system or approach to technical analysis.

If you want to get good at technical analysis, you need to find a method that works for you and stick with it until you know how it works inside and out. That way, you can automatically identify the areas where you can improve and adjust your strategy accordingly.

2. Multiple time frames or just a single time frame?

There can be endless debate about the merits of using multiple time frames in technical analysis. Some forex traders swear by it, while others are content with technical analysis on a single time frame.

What few realize is that switching from one time frame to another means that you can discover something that you would otherwise miss.

Remember, while this is helpful, it by no means gives you the coveted edge in the markets that we all strive for. The key is to be clear about whether the time frame(s) you are using complement the technical analysis methods you are using.

3. Back to basics

You may be using price action techniques, or perhaps you are fond of forex indicators. Regardless of which methods you use, it is always helpful to take a closer look at the techniques you are using.

Some technical analysis methods go back decades. For example, the Elliott Wave method and Andrew’s Pitchfork method have been around for ages. Using such methods in technical analysis will help you understand how these concepts came to be and why.

You will be surprised how much the technical analysis methods you use today have changed over the years.

It can be a nice walk down memory lane, but you may also pick up a trick or two. This will undoubtedly help you gain more confidence in technical analysis.

4. Learn which markets you should work on

Whether you are trading forex, stock CFDs or commodity CFDs, some methods of technical analysis are only suitable for a particular market. Therefore, it makes sense that you first understand the markets for which your technical analysis methods were originally developed.

For example, simple indicators such as the Advance/Decline or VIX indicators are primarily suited for the stock markets.

Would it therefore make sense to use such indicators in the foreign exchange markets? Obviously not! Likewise, it is always helpful to stop and take a step back to understand for which markets the methods of technical analysis are designed.

5. Read & Learn

For many forex traders, learning technical analysis ends with a method they are familiar with. But it’s something that evolves every day. The only way to improve your technical analysis methods is to make sure you are up to date.

This might mean subscribing to technical trading journals or even buying some technical analysis books. My personal recommendation would be the book by John J. Murphy. It is a great introduction to research and gives a good insight into the different methods of technical analysis!