Several Practical Analysis Methods in Foreign Exchange Trading

Some foreign exchange traders find technical analysis indicators obscure and fearful of them. In fact, in addition to technical indicators, we can also grasp the timing of entering the market by observing the trend of exchange ratesIEXSIt is also very common in foreign exchange.

foreign exchange marketIt works continuously for 24 hours, rising and falling, never stopping. Its trend is like the day and night on the earth, repeating itself. Correspondingly, we can divide the market trend of foreign exchange rates into four stages: bottoming, rising, topping and falling. These patterns can be judged by observing the trend chart of the exchange rate, such as the commonly used K-line chart.

First, the bottoming stage. The exchange rate bottoming forms generally include triple bottoms, head and shoulders bottoms, double bottoms (W bottoms) and semi-round bottoms (pot bottoms). The larger the lateral construction area of the bottom, the more kinetic energy accumulated on behalf of the rise, and the greater the range of rise. At this stage, you can carry out interval operations of buying low and selling high. For example, conservative operations can give up the profit opportunities at this stage and move to the next stage.

Second, the rising stage. When the exchange rate breaks through the neckline at the bottom of the previous period, it indicates the beginning of a rising trend, and the rising height is generally the vertical height of the bottom of the previous period. This stage is like a young man with abundant physical strength, rushing forward desperately, running far and jumping high. Although he has no endurance, he can start again after a short break when he encounters difficulties. The main stage of the market's rise is large and fast. Although it lasts for a short time, he can immediately launch a new round of upside if he encounters upward pressure with a little retracement. The initial period of this stage is a time to chase and buy, and the rising stage is also the main source of profit. For IEXS foreign exchange participants, this stage of operation is particularly critical.

Third, the head-building stage. This is the late stage of the rising stage. At this time, the market trend attempts to push up again, but the bulls cannot break through the previous wave of highs with all their strength. Finally, they break through the neckline to complete the head and enter the falling stage. At this stage, the early medium and long-term orders should be sold in a timely manner, and the short-term can try the fast-forward and fast-out range operation.

Fourth, the falling stage. The same principle as the rising stage, but in the opposite direction. At this stage, people are disillusioned, the exchange rate is unable to support, and the falling speed is rapid until the momentum disappears and turns to the bottoming stage. In the falling stage, you should decisively stop your losses, and the stop loss should be stopped quickly, otherwise the loss may be greater.