FOREX TRADERS

[Capitalist]

If I draw a price support line and wait till it breaks it to go short am I trading technically?
I don't think so.
It is all up to interpretation.


Hopefully I don't get drawn into some kind of a big brawl here, LOL, but I've got to differ with you on a couple of points there Dr. Ultimate.

There's a clear and objective dividing line between TA and FA. You may have heard some older analysts talk about "the internals" when talking about technical analysis or "external factors" when discussing the fundamentals. This is a good way to look at the difference.

Bars on a price chart are all composed of only five basic variables; open, high, low, close and volume. Technical analysis deals with any signal that can be derived solely from this price information. This includes support and resistance lines, trendlines, Fib levels, MACD, RSI and any other kind of chart indicator you can think of. These are what are called "internals" because they are internal to the price chart.

In other words, if you can find the signal without lifting your face up off of the price chart, you're doing technical analysis.

On the other hand, you can look at a chart of USD/JPY for a week and it won't tell you what Japan's GDP is or what the inflation rate of the U.S. is. No chart of IBM is going to tell you who the chairman is or what it's cash flow statement looks like. Those things are external to the chart and that's what makes them fundamental indicators.

Internal to the chart: TA
External to the chart: FA