Technical aspect
There are two ideas for analyzing financial markets: fundamental and technical analysis. Technical analysis studies price changes, while fundamental analysis studies the economic reasons behind price changes.
Technical analysis is based on the use of price patterns and/or statistical data to study changes in prices. It has been very popular in the past few decades, especially with the development of new innovation and technology. This gives investors the ability to quickly analyze changes and trends through computers. Technical analysis provides insights into the behavior of foreign exchange investors Investors use charts to identify patterns and trends and make successful trading decisions. Technical analysis can be used in different time frames. Whether it's monthly, daily, hourly, or even minute, investors need to choose based on their trading style. The three widely used concepts for technical analysis are:
1. Support and Resistance Lines
2. Trends
3. Fibonacci Line
Support can be defined as a 'floor' currency combination that is difficult to fall below.
Resistance, on the other hand, is exactly the opposite: the 'ceiling' is difficult to break through through through its currency combination.
The reason why prices are difficult to break through these lines is because there were many actual trading orders near these lines in the past. There is no fixed formula that can accurately calculate these line positions. They are obtained by observing the market, thus involving a very subjective factor.
Support can be defined as a 'floor' currency combination that is difficult to fall below.
Resistance, on the other hand, is exactly the opposite: the 'ceiling' is difficult to break through through through its currency combination.
The reason why prices are difficult to break through these lines is because there were many actual trading orders near these lines in the past. There is no fixed formula that can accurately calculate these line positions. They are obtained by observing the market, thus involving a very subjective factor.
Simply put, a trend is the direction of a currency combination, which can be upward, downward, or horizontal. The length of a trend determines its strength. In an upward trend, the chart should start from at least 2 low points, with the second point higher than the first point. On the downward trend, there should be two high points, with the second point being lower than the first point. Horizontal trend, with 2 high points and 2 low points at the same level. When the price trend is within a relatively fixed trading range, a channel is formed.
3 Chart Trends:
Upward trend
Horizontal trend
Downward trend
These are the prices at which a trend begins to rebound after it ends. The key figures for Fibonacci's turnaround are 38.2%, 50%, and 61.8% in most markets. Assuming that the currency combination ranges from 1.2000 to 1.3000 during an upward trend, accumulating 1000 points. How much pullback will there be when the currency combination reaches 1.3000? 38.2%: The magnitude of the change is 1000 points. So 1000 * 0.382=382 points. Therefore, after an increase of 1000 points, we expect the currency portfolio to retreat by 382 points.
Using similar calculations, we found that after a 1000 point increase, there may be a pullback of 500 to 50% and 618 to 61.8% levels. It is obvious that a 50% level is a more important buying price compared to 38.2%, and 61.8% is more significant.
Fibonacci