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Technical Intoduction

Price
The Fundamental Principles of Technical Analysis are based on the Dow Theory with the following main thesis:

1. The price is a comprehensive reflection of all the market forces. At any given time, all market information and forces are reflected in the currency prices.
2. Price movements are historically repetitive.
3. Price movements are trend followers.
4. The market has three trends: primary, secondary, and minor.
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Trend
Are you trading with a TREND?
To be consistantly profitable in Forex, traders should be able to identify market trends.
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Volume and Open Interest
Volume consists of the total amount of currency traded within a period of time, usually one day. For example, by year 2000, the total foreign currency daily trading volume was $1.4 trillion.
But traders are naturally more interested in the volume of specific instruments for specific trading periods, because large trading volume suggests that there is interest and liquidity in a certain market, and low volume warns the trader to veer away from that market.
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Gaps
An opening outside the previous day's or other period's range generates a price gap.
Price gaps, as plotted on bar charts, are very common in the currency futures market.
Although currency futures may be traded around the clock, their markets are open for only about a third of the trading day. For instance, the largest currency futures market in the world, the Chicago IMM, is open for business 7:20 am to 2:00 pm CDT. Since the cash market continues to trade around the clock, price gaps may occur between two days' price ranges in the futures market. There are four types of gaps: common, breakaway, runaway, and exhaustion.
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