| Updated: September 15, 2025What you need to know about the forex market
This lesson will cover the following
- Social trading and technical analysis
- What is technical analysis?
- Can you trade without using it?
If you’ve read our guide so far, then you’ve definitely encountered the term ‘technical analysis’. If you want to learn more about technical analysis in detail, we have a specialised guide for that on our site. In this section, we will explain some of the basic concepts, as well as why it’s important to know it.
What is technical analysis?
Simply put, technical analysis is the process of analysing data in order to make predictions about the future movements of an asset’s price. Technical analysis is based on the premise that past movements may hint at future movements. In many ways technical analysis is rather useful, but you need to know what you’re doing in order to utilise it. You need to be able to read charts, spot patterns, identify levels of support and resistance, and move on from there.
Why do you need technical analysis?
Social trading is a relatively new approach to trading and helps you make financial decisions based on what other people think. However, this hasn’t always been the case. Before that, the use of fundamental and technical analysis was needed in order to anticipate market movements. Even now, in the midst of social trading platforms, there are traders dedicating hours of their time every day to produce the predictions you’re using.
If you’re a relatively new trader, you might be thinking, ‘Why would I need technical analysis? I am already copying traders.’ As we’ve said in the previous section, you don’t really need it if you want to trade like this. You can still rely on signals from traders you deem trustworthy. You can copy traders and have no idea why they’re doing what they’re doing. It’s OK. You can still invest. You can have a people-based portfolio. You can still make money.
However, if you want to be a real trader, you need to know much more than just the user base of your social trading platform. You need fundamental or technical analysis (ideally both if you want the best results, although that involves a lot of data); you need to know the market, and you have to constantly improve, read and research. You will have to adapt your style, evaluate trades, make contingencies and more. It’s a lot of effort, but it’s what it takes to be a real trader.
Can you trade without technical analysis?
Well, of course you can trade without technical analysis. The whole premise behind social trading is to give investment opportunities to people who know little or nothing about analysis, investments, the market and more. You can either use this system to utilise others and trust in their abilities, count on their success and hope for the best; or you can actually use social trading as a way to learn a lot more, a lot faster.
You don’t need technical analysis. But knowing how to perform it can be extremely helpful. Evaluating another trader is much easier when you actually know a thing or two about decision-making. If you’re not sure what is going on in the market, then you will simply have to trust what others think, and they can be wrong. Technical analysis will help you make better decisions. It will be another way of verifying whether taking a certain course of action is worth it or not. At the end of the day, it can’t hurt you to be informed. It can only improve your chances. You just need to be confident enough in your abilities without being full of yourself. If you think that you’re right every time, then you might make some wrong moves you wouldn’t have otherwise made. This would be the product of your own arrogance, and arrogance here is not beneficial.
However, if you see that a trader who has proved themselves is taking a certain action, and you share their views after examining the data, then this significantly improves your chances. In one way or another, it’s worth taking the time to learn technical analysis if you’re serious about trading. If you don’t want to learn and hope to make money off others’ efforts, then you should focus on the social aspects more – evaluating traders, finding good investors and more (although technical analysis can help you with that, too).
Final words
Learning technical analysis will take time and there can be some downsides to it, but ultimately the pros significantly outweigh the cons. Just take a few minutes and at least look at our guide here. See what we have to offer. See what you can learn and how long it will take. Don’t be hasty. Take your time. If you still don’t think it’s worth it, don’t learn it. But we would definitely recommend learning it. Even if you prefer copy trading, knowing technical analysis will help you become a more serious trader. Knowing something new can’t be a bad thing, can it? Give it a shot and you won’t regret it.