The timing of foreign exchange entry or exit is a very important link in the transaction process that cannot be ignored. Closing a position is a decisive step to end the transaction and to realize the final profit. How to grasp the timing of foreign exchange speculation?
In the foreign exchange market, the exchange rate fluctuates in stages and follows a certain trend. We can see a series of price crests and troughs from various currency charts. It is these crests and troughs that constitute the price movement trend of the entire currency. Two concepts “support” and “block” are introduced here.
The trough in the movement of foreign exchange speculation is the support, which is a certain price or a certain price range. Under the support, the buyer’s power is strong, so under normal circumstances, the exchange rate will stop the downward trend when it hits the support price, and then rebound upward, thus forming a trough. Blocking is the opposite of support and appears as a crest in the exchange rate chart. In the same way, during the movement of the exchange rate, because the seller’s power is greater than the buyer’s, it prevents the price from further rising, causing it to fall, forming a temporary high within a certain period of time.
It can be seen from the exchange rate chart that the current support price or barrier price for foreign exchange speculation is often a historical support or barrier price, and support and barrier can interchange roles. Once an important support price is broken, it will Change to an important barrier price; there are other supports or barriers, such as the price near the trend line, 50%, the golden ratio callback price and so on.
As a general foreign exchange investor, you can analyze it yourself, or you can accurately understand the important supporting or blocking prices of various currencies through various authoritative media.