​Technical Analysis: Your Potential Enemy!

Technical analysis is a great tool for the prediction of market prices, more popular than fundamental analysis. It is suitable for all people in forex trading but not applicable to all situations in this field. Under some circumstances, the superior technical analysis in the past can destroy your trading at present!

1. The advent of breaking news. Even the most reliable ways of technical analysis may succumb to uselessness when the consequences of headlines are far beyond expectation. Contents associated with disasters and terrorism often rock the market the most.

2. Holiday market. Trading during major holidays is not recommended due to the extremely low volumes of transactions during vacations and the fairly unbalanced market caused by drastic changes of prices in all directions. Heavyweight speculators may tap this juncture to manipulate the market.

3. Outburst of the bubble. Some markets hardly adhere to the rules of technical analysis after being played up. If a currency pair sees a bubble growth, transactions conducted based on this surge are possible to make handsome profits come true but please dont expect your support level or resistance level can work at this moment!

Please bear in mind that the above-mentioned situations triggered by technical analysis can cause highly risky and devastating transactions. This awareness can prevent your trading tactics from irresistible impacts!

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