Important Information

You are visiting the international Vantage Markets website, distinct from the website operated by Vantage Global Prime LLP
( ) which is regulated by the Financial Conduct Authority ("FCA").

This website is managed by Vantage Markets' international entities, and it's important to emphasise that they are not subject to regulation by the FCA in the UK. Therefore, you must understand that you will not have the FCA’s protection when investing through this website – for example:

  • You will not be guaranteed Negative Balance Protection
  • You will not be protected by FCA’s leverage restrictions
  • You will not have the right to settle disputes via the Financial Ombudsman Service (FOS)
  • You will not be protected by Financial Services Compensation Scheme (FSCS)
  • Any monies deposited will not be afforded the protection required under the FCA Client Assets Sourcebook. The level of protection for your funds will be determined by the regulations of the relevant local regulator.

If you would like to proceed and visit this website, you acknowledge and confirm the following:

  • 1.The website is owned by Vantage Markets' international entities and not by Vantage Global Prime LLP, which is regulated by the FCA.
  • 2.Vantage Global Limited, or any of the Vantage Markets international entities, are neither based in the UK nor licensed by the FCA.
  • 3.You are accessing the website at your own initiative and have not been solicited by Vantage Global Limited in any way.
  • 4.Investing through this website does not grant you the protections provided by the FCA.
  • 5.Should you choose to invest through this website or with any of the international Vantage Markets entities, you will be subject to the rules and regulations of the relevant international regulatory authorities, not the FCA.

Vantage wants to make it clear that we are duly licensed and authorised to offer the services and financial derivative products listed on our website. Individuals accessing this website and registering a trading account do so entirely of their own volition and without prior solicitation.

By confirming your decision to proceed with entering the website, you hereby affirm that this decision was solely initiated by you, and no solicitation has been made by any Vantage entity.

I confirm my intention to proceed and enter this website Please direct me to the website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom

By providing your email and proceeding to create an account on this website, you acknowledge that you will be opening an account with Vantage Global Limited, regulated by the Vanuatu Financial Services Commission (VFSC), and not the UK Financial Conduct Authority (FCA).

    Please tick all to proceed

  • Please tick the checkbox to proceed
  • Please tick the checkbox to proceed
Proceed Please direct me to website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom.


Are you long or short on indices?

Trade Indices Now >
Long Or Short On Indices?


View More
  • All
  • Search
  • Forex Trading
  • Vantage Rewards
  • Spreads
  • facebook
  • instagram
  • twitter
  • linkedin
  • youtube
The Basics of Technical Analysis In A Nutshell


The Basics of Technical Analysis In A Nutshell

The Basics of Technical Analysis In A Nutshell

Vantage Updated Updated Sat, 2024 January 27 03:21

In Forex trading, there are two primary types of analysis commonly used by traders: technical and fundamental analysis. In this article, we explain the basics of technical analysis and how it can be used.  

What is Technical Analysis?

The study of movements in the financial market is often referred to as technical analysis. More specifically, it refers to the study of historical price movements to determine future movements or prices of a financial instrument.

The concept of technical analysis has been around for hundreds of years, and the earliest form of technical analysis was adopted by Joseph de la Vega who used the skills to predict Dutch markets in 1683 [1]

Through the constant advancement of financial technology and tools created, the popularity of technical analysis continues to grow not just within forex markets but other asset classes as well.  

Understanding Technical Analysis

In technical analysis, traders use either chart patterns, technical indicators, or even a combination of both to predict future trends. Experienced traders who rely heavily on technical analysis believe that everything traders need to know, is already reflected in the instrument’s price history. 

Chart Patterns

The subjective form of technical analysis is called chart patterns.

Using chart patterns could help to determine where prices are headed, at least in theory. Such patterns can include:

  • Candlestick Patterns
  • Trendlines
  • Fibonacci Retracements
  • Supply & Demand

Technical Indicators

The statistical form of technical analysis is through technical indicators.

Technical indicators act as an interpreter of the markets and traders can use such information to their advantage. In total there are 3 major umbrellas of technical indicators: Trend, Oscillators, and Volume. For more advanced traders, custom technical indicators may also be adopted to help determine an instrument’s future price. 

Using Technical Analysis

An instrument can be viewed through multiple timeframes. Technical analysis conducted on the higher timeframes holds more weight compared to ones conducted on the lower timeframes. As such, technical analysts often implement a top-down approach where technical analysis is conducted on the higher timeframes and sharpened as the timeframe narrows. 

The top-down approach begins when a trader views the higher time frame to conduct technical analysis. The trader then scopes into a lower time frame to compare if the bias on the lower timeframes matches the bias on the higher timeframes. 

Technical analysis conducted on the higher time frame gives a broad, longer-term view of the direction of the market while analysis on the lower time frame shows a short-term and detailed price movement. 

Forex Technical Analysis Use Case

In this forex technical analysis use case, a forex trader focuses on the EUR/USD currency pair to begin trading at the beginning of March utilising a mix of indicators to guide trading decisions. 

The trader uses the 50-day and 200-day moving averages to determine the overall trend, looking for moments when the shorter moving average crosses above the longer one to signal a bullish trend called the golden cross. 

A graph of stock market

Description automatically generated
Chart 1: Example of 50-day moving average crosses above the 200-day (  

Upon identifying a bullish signal when the 50-day moving average crosses above the 200-day, the forex trader observes another bullish indicator through a bullish engulfing candlestick pattern, as shown in the chart below. In such trading scenarios, the trader can enter a long position while using a stop-loss to manage risk and setting a take-profit target based on their individual risk tolerance.

Chart 2: Example of Bullish Engulfing Pattern (

This approach illustrates a structured strategy that uses multiple technical indicators to validate each trading decision. By continuously monitoring the trade and employing suitable risk management techniques, forex traders can capitalise on market movements while managing potential losses through proper technical analysis.

Do bear in mind that knowing how to effectively use technical indicators to find entry and exit points, and to outline your trading strategy, takes time and experience. You can learn more about how to use technical analysis for your trading by attending our free webinars where our market analysts will discuss trade setups in detail.


Combined with the right strategies and tools, technical analysis may be relatively effective in identifying patterns on chart but certainly does not guarantee the prediction of future prices in the volatile financial market. Technical analysis aside, there are many other factors to consider in order to achieve long-term success in trading. Be it technical or fundamental analysis, you may find one approach that fits you best through trial and error, and continuous learning. Looking to take your first steps to conduct technical analysis? Practise with our demo account here.


  1. “Behavioral Finance in Joseph de la Vega’s Confusion de Confusiones – Tyalor & Francis Online” Accessed 5 Feb 2023


  • vantage academy open account

    Open Trading Account

    Discover the endless trading possibilities with our cutting-edge platform, designed to empower both beginners and seasoned traders alike.

  • vantage academy app

    Download Vantage App

    Trade on the go with the Vantage All-In-One Trading App, where smooth execution and market access come together in the palm of your hand.

  • vantage academy start trading

    Start Trading

    Are you an existing user? Login to your account to start trading 1,000+ products including forex, indices, gold, shares and more.