In the currency circle, technical analysis plays an important role because it helps investors understand the supply and demand dynamics of the market. Although it cannot provide a definite answer, it can be used as a probabilistic tool to guide investment decisions.

1. Impact of market sentiment: Investors’ sentiment has a significant impact on market fluctuations. When most investors only focus on getting back money instead of making money, the market's corrections and rebounds may be affected, with less resistance or an increased possibility of a V-shaped reversal. On the contrary, if more and more people are only pursuing repayment and market supply increases, the price rebound may appear weak, because unwinding funds tend to sell when prices rise.

2. Principle of technical analysis: Technical analysis is essentially based on the principle of supply and demand, and speculates on the psychology and behavior of market participants by analyzing details such as price trends, trading volume, and patterns. For example, patterns such as rising channels and falling wedges often reflect changes in market supply and demand and potential trend turning points.

3. Risk Management: Technical analysis not only helps identify market trends but also helps in formulating effective risk management strategies. By identifying support and resistance levels, as well as various forms of breakout signals, investors can reduce risks and increase the odds of winning a trade.

4. Adapt to market changes: The market in the currency circle changes rapidly and violently, and technical analysis can help investors adapt to such changes. It provides a way to understand the sentiment and behavior of market participants, and although it cannot predict the specific behavior of each participant, it can adjust trading strategies based on price movements and volume changes.

In short, technical analysis is a double-edged sword in the currency circle. Although it cannot guarantee 100% accuracy, when used correctly, it can provide guidance and decision-making support for investors and help them find the direction in the market. and opportunities.

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