What is a flat foreign exchange?
Sideways means that the exchange rate fluctuates little over a period of time, and there is neither a clear upward trend nor a clear downward trend, and the exchange rate is in a volatile order. Forex sideways not only appear at the head or bottom of the market, but also appear on the way to an up or down trend. According to the different stages of the exchange rate movement in foreign exchange transactions, we can divide them into four situations: rising sideways, falling sideways, high sideways, and low sideways.
Foreign exchange sideways
How to judge that it is a sideways exchange?
After experiencing a sharp unilateral trend, the long and short sides diverged. At this time, because the original long or short force no longer agreed with the current price, they chose to take a profit and the long and short sides temporarily achieved a certain balance. From the technical trend, we will see a horizontal fluctuation range. The slope of this adjustment interval during operation is basically low, while the amplitude during lateral operation is within 100 points, and the operation time is about 1-2 days.
A trading method where the volatility of the flat range is within 100 points
The fluctuation range is within the range of 100 points, and we often see it in the course of the hourly chart. This type of interval is often a periodical adjustment to a period of ups or downs. At the same time, if this type of interval is a fluctuation interval with a low slope, high repeatability and obvious holes formed around the apex during the callback process, it is what we often call a secondary rhythm adjustment, which is more conducive to the continuation of the original direction.
If this type of interval appears, and the slope of the operation is lower than 45 degrees (less than 30 degrees is better), if it is an adjustment during the upward process, we need to consider pending orders above the lower edge of the horizontal interval. The break of the lower edge of the horizontal interval is used as a stop loss, and the profit after the interval upward breakthrough is sought; if it is an adjustment formed during the downward process, we need to plan pending orders below the upper edge of the horizontal interval, and take the break of the upper edge of the interval as the stop loss , The same is to obtain the profit after the interval breaks down. If this type of adjustment interval appears in the rhythm of a flag or triangle relay pattern, it will be more conducive for us to follow the trend of the market for trading. The main trading idea for small ranges is to follow the trend.
Sometimes, this type of adjustment interval is not adjusted around the apex, but runs in a diffusion interval where the highs rise and the lows decrease, which is what we often call the rhythm of diffusion; it is also possible that the lows will decrease during the decline. The homeopathic adjustment range in which the high point is gradually decreasing (if it is in the process of rising, it is a homeopathic wedge in which the high point is gradually raised and the low point is also raised). As long as the overall operation slope is low, the probability of continuing the original trend operation at this time is still high.
However, the diffusion rhythm and the probability that the homeopathic wedges play the relay and reversal effects each account for 50%. Therefore, in the trading process, we focus on choosing a relatively standardized adjustment interval running around the apex for planning; if a homeopathic or diffusion type is formed We need to plan further after the direction is clear.