# Berniston Review: How to do a technical analysis before investing in forex [berniston.com]


Technical analysis is essential for forex traders and investors, particularly [Berniston](https://www.linkedin.com/pulse/berniston-review-explaining-trading-analytics-lisa-ruiz-bpobc) traders. Technical analysis uses historical price charts and market data to detect patterns and trends to assist traders in deciding when to enter or leave transactions. How to do a thorough technical analysis before trading in FX using Berniston:

**Pick Your Timeframe**

Technical analysis begins with choosing a trading strategy time frame. Intraday to monthly or annual periods are available to traders. Choose a time window that matches your trading objectives and risk tolerance. For instance, day traders may favor shorter time horizons than position traders.

**Find trends**

Trend identification is key to technical analysis. Uptrends, downtrends, and sideways trends exist. Popular trend-spotting methods include:

Moving Averages: Moving averages smooth price data and indicate trend direction. Simple, Exponential, and Weighted Moving Averages are common.

Trendlines: Trendlines link uptrends or downtrends, giving visual support and resistance.

Channels: To define the trend's bounds, draw two parallel trendlines along the highs and lows.

**Assess Support and Resistance**

Support and resistance are key technical analysis concepts. Support levels are projected to demand levels that might stop or reverse a downturn. Prices at resistance levels indicate heavy supply, which might stop or reverse a rise. These levels may be discovered using numerous methods:

Horizontal Levels: Previous highs and lows might provide support or resistance.
Trendlines: Trendlines might indicate dynamic support or resistance.

**Incorporate Indicators**

Technical indicators are mathematical calculations based on price and volume data that reveal market activity. Some common technical analysis indicators are:

MACD: This trend-following indicator may indicate trend alterations and entry and exit locations.
Relative Strength Index (RSI): The RSI evaluates price movement speed and strength to detect overbought or oversold positions.
Stochastic Oscillator: This momentum indicator compares the price at closing with a high-low range over a period to identify overbought or oversold circumstances.
Average True Range (ATR): Volatility values may help set stop-loss levels and position sizes.

**Multi-Time Frame Analysis**

Using several periods might help you comprehend market dynamics. Start using a higher time frame (weekly or monthly) to determine the trend direction, then zoom into shorter time frames (daily or hourly) to find entry and exit points.

**Plan your trades**

A detailed trading strategy is needed after technical analysis. Your trading strategy should include entry and exit, risk management (stop-loss and profit objectives), position size, and money management. Trading discipline and consistency may be maintained with a well-defined trading strategy.

**Retest and Optimize**

Your trading technique must be back-tested using historical data before implementation. Back-testing lets you assess your strategy's success in different markets and adjust it as needed. Optimization may also help you identify the best indicator and strategy settings.

**Try a Demo Account**

After developing and back-testing your trading technique, practice using a Berniston or other Forex broker demo account. Trade with virtual cash on a demo account to develop experience and confidence before risking real money.

**Conclusion**

Technical analysis should complement fundamental analysis and risk management. Staying current on market news and events affecting currency pricing is also crucial. This complete technical analysis technique will help you make educated trading choices and succeed in the FX market with Berniston or another trading platform.