Technical Analysis is used by traders who don’t take fundamental factors into consideration while trading. It is applied to understand the price movement of the forex market. Technical analysis is useful in making short-term predictions which are hard to do with fundamental analysis. Traders use it various technical studies for interpreting the movements in the forex market. By studying charts, technical analysts can easily forecast the movements of currency pairs in the market. Charting software provided by many forex brokers is good enough for using technical analysis, but it is important that you should learn to read and understand charts and correctly interpret the forecasts made by your technical analysis.

FXMan

The forex technical analysis is concerned with what has actually happened in the forex market, rather than what should happen.
A technical analyst will study the price and volume movements and from that data create charts (derived from the actions of the market players) to use as his primary tool. The technical analyst is not much concerned with any of the “bigger picture” factors affecting the market, as is the fundamental analyst, but concentrates on the activity of that instrument’s market.
Technical analysis is based on three underlying principles:
1. Market action discounts everything
2. Prices move in trends
3. History repeats itself
List of categories of the technical analysis theory:
# Indicators
# Number theory
# Waves
# Gaps
# Trends
# Chart formations

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I've studied number theory basics in university. Can you tell more precisely about number theory application in analysis? Where can I read about it ?

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Yeah sure
I am explaining you number theory
Number theory (Fibonacci numbers, Gann numbers)
Number theory:
Fibonacci numbers: The Fibonacci number sequence (1,1,2,3,5,8,13,21,34...) is constructed by adding the first two numbers to arrive at the third. The ratio of any number to the next larger number is 62%, which is a popular Fibonacci retracement number. The inverse of 62%, which is 38%, is also used as a Fibonacci retracement number.
Gann numbers:
W.D. Gann was a stock and a commodity trader working in the '50s who reputedly made over $50 million in the markets. He made his fortune using methods that he developed for trading instruments based on relationships between price movement and time, known as time/price equivalents. There is no easy explanation for Gann's methods, but in essence he used angles in charts to determine support and resistance areas and predict the times of future trend changes. He also used lines in charts to predict support and resistance areas.

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