How to analyze the support line for foreign exchange speculation?

2023-06-05
Summary:

Learn effective strategies for analyzing support lines in foreign exchange speculation. Enhance your trading skills with EBC and achieve success.

During the process of foreign exchange speculation, many traders use technical indicator analysis to make orders. The support line is a very important foreign exchange technical indicator that can be used to help traders analyze market trends. Today, Teacher Fei Qin will explain to you how to analyze the support line for foreign exchange speculation.

How to analyze the support line for foreign exchange speculation? What is the analysis method for the support line of foreign exchange speculation?

Analysis of the situation of the support line reel. When there is a stall near the overall support line in the foreign exchange market, a longer negative line will appear after consolidation. At this time, investors will flee in order to reduce losses, leading to a sustained decline in prices for a period of time. When a long positive line appears near the overall support line, the support line will show its effect, and traders can trade according to their actual situation.


Analysis of support lines in an upward trend. When the overall market trend shows an upward trend, the support line will also have different effects. When both upward and downward shifts occur, if the K-line always shows a negative line, it means that the power of bears is constantly increasing. If there is a rebound near the support line at this time, investors should not easily believe it, because at this time, the takeover is no longer strong, and the price will still fall below the support line.


In another situation, when the trend is upward, the negative line of the K line during the retracement is relatively weak compared to the previous negative line. Therefore, the price will approach the support level, and the trading volume will greatly shrink. The subsequent positive line will eat up the negative line, and the price will rise again. This is what we call effective support.


In foreign exchange trading, the support line refers to the trend line that occurs when the price drops to a certain extent, causing the price to rebound and rise. Here are some methods for analyzing support lines:

1. Pre low point method: By looking at the low point of the pre price curve, find the lowest point and connect it into a trend line, which is the support line.


2. Moving average method: Draw the short-term moving average and long-term moving average on the price curve. When the price drops near the long-term moving average, it can be considered as a support area.


3. Price oscillation method: When prices fluctuate within a range, the support line can be determined through continuous low points.


4. Fibonacci callback method: Calculate the support bit by using the ratios in the Fibonacci sequence, typically using ratios of 38.2%, 50%, and 61.8%.



The support line is not fixed, and market changes can affect the position and effectiveness of the support line. Therefore, it is necessary to continuously observe market trends and adjust the position of the support line in a timely manner. At the same time, attention should also be paid to risk control to avoid losses caused by blind reliance on support lines, seize the opportunity to enter and make profits, and obtain more profits.


【 EBC Platform Risk Reminder and Disclaimer 】: There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice.

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