Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Technical analysis definition

Technical analysis is a means of examining and predicting price movements in the financial markets, based on an asset’s chart history. It is one of the two major schools of market analysis, with the other being fundamental analysis.

Unlike fundamental analysis, technical analysis is based purely on the price charts of an asset. External factors and intrinsic value are not taken into account, with the identification of patterns on a chart instead used to predict future movements.

Technical analysts have a wide range of tools to find trends and patterns on charts. Some of the key tools used include moving averages, support and resistance levels, or bollinger bands. All of the tools have the same purpose: to make understanding chart movements and identifying trends easier for technical traders.

Learn more about technical analysis

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Learn more about the charts, trends and tools used in technical analysis in our education section.

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