Does technical analysis work the same in all pairs?

If a trading method based on technical analysis would work in one pair and timeframe, does it mean it works the same in all pairs and timeframes? Give me a profession opinion please.

Different pairs exhibit different properties.Some do well on breakout than bounce and the converse of the statement is also true.More importantly,every trader needs to know the principle underlying the method in use.The principle is the principal thing.for instance, a method designed to function in a trending market will fail in a ranging market and vice versa.Moreso,some pairs range more than the other while some trend more than the others too.For a well trending pair like eurusd and gbpjpy,breakout system or method is appropriate while a well ranging pair like gbpusd is good for a bounce methods.In a nutshell,the best is to understand the principle of operation of a method before one use it on a live account.All good trading methods are derivatives of price behaviour around suppot and resistance levels.Therefore,support and resistance are the foundation of all trading methods or analysis.The reliability of a trading system is a function of it`s response to price action of a particular pair around support and resistance levels.

Its the trading attitude that matters. You can find some traders who are trading almost all forex pairs + stocks + commods + poker . But there are traders who are trading only one or two pairs throughout the quarter or year. So people who are trading multiple instruments simultaneously can have specific strategy for each one out there, we are talking about 15-20 methods atleast. A basic strategy and experience with the instrument is all that is needed

Other than pecularities, a basic strategy employed might work with all of them.

Yes it will always confirm what just happened.

Good question.

Re pairs:
I think correlation is a big factor. When 2 currencies are highly correlated, their pair generally exhibits sideways movement with large candle wicks, giving their chart a 'jagged', messy look. AUDNZD is frequently a case in point. EURGBP is another interesting example, on (say) a H1 TF. It moves in a distinctive sideways pattern when EUR and GBP are correlated, i.e. when USD is supposedly the 'driving force' behind both GBPUSD and EURUSD. Then when the correlation breaks down, EURGBP makes some very clean, and hence tradable, moves. Of course we're talking chicken-and-egg as to whether price movement causes correlation, or is the result of correlation caused by shifting fundamentals.

'Self fulfilling prophecy' type concepts like S/R and round number levels tend to be respected more often, and more accurately, on the major pairs. I'm guessing here, but I expect that this is partly because the majors are more widely traded, and the larger collective volume of traders creates more 'logical' order flows, while the cross-pair prices are, to whatever extent, mere derivatives of the majors, e.g. EURGBP = EURUSD / GBPUSD. Again, it would depend on which currency/ies are 'driving' the move.

Different pairs exhibit differing levels of volatility, and have different average daily ranges. For example, GBPJPY generally moves many more pips in a day than EURUSD. So if one's strategy is dependent on, or affected, by these factors, then it would obviously need to be scaled to be pair-specific.


Re timeframes:
'Price action' concepts like candle patterns and certain types of S/R tend to be rather more reliable on longer TFs. But if your method involves use of indicators (MAs, MACD, oscillators, etc), then these can have an 'equalizing' effect, TF-wise, simply because it's possible for trends, overbought/oversold conditions, etc to occur on any TF. But these are very general observations only.

Obviously MM considerations like stoploss width (and hence position size) are TF-critical also.

yep. the more people in the market, the more likely they are to place an order on the same level, creating a stronger or more reliable SR zone. i've heard of people with "ladder system" information trading using this concept. the ladder system is when you can buy 1.5MIL EURUSD at 1.2345, 1.3MIL at 1.2340, 1.0MIL at 1.2335 etc. the more volume available at a certain level, the more likely this level will be an "action" point in the market. this could be a previous SR zone or a round number like hanover mentioned.


in my experience with TA, i've found out that everything is relative, at least in terms of actual analysis. ranges might be different for the different pairs, but the realtion between today's GBPUSD range and yesterday's will be similar to the relation bewtween today's EURUSD range and yesterday's. in other words, on the charts, the candles (in relation to each other) will look pretty similar, even if they are hugely different. a two inch candle on EURUSD might be fifty pips, and a two inch candle on GBPUSD might be a hundred pips. but they will both look the same.

so, in this case, i believe using technical analysis on both these pairs will pretty much be the same. as hanover said, the pips and numbers will be different, but the charts will LOOk the same.


also, it depends on what you are looking at. if you are looking for chart patterns like channels, triangles, and wedges, they will be the same no matter what. a pattern is a pattern, you know? but if you are looking at things like bounces and breakouts, the principles will be the same, but the outcomes might differ. using things like moving averages or bollinger bands should yield a similar effect, but things like fibo line sor pivot points might not.

generally, i say that TA can pretty much be used the same way on all pairs, but the term "technical Analysis" is so wide and vague that it HAS to be generalized.

my advice would be to sit down and study the pairs you like. watch them. put three of them up at a time and compare what they do. see how X reacts to a moving average, and how Y follows X, or what levels Z tends to bounce off of etc. use your brain and you should be find bud. good luck!

Ewww luck...

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