Five key laws of currency speculation that traders must understand!
In the currency circle full of variables, there are five important laws worth remembering for currency speculators.
First, if the currency price rises quickly and falls slowly, it often means that it is absorbing chips. Rapid rise indicates strong capital push, while slow decline shows that the dealer is constantly accumulating chips in this process, accumulating power for the next round of rise.
Second, when the situation of falling quickly and rising slowly occurs, this is a signal of shipment. Rapid decline indicates that the dealer is eager to sell the chips in his hands, and the slow rise is only to attract retail investors to take over. At this time, the market is about to enter a downward cycle.
Third, do not sell easily when the volume is large at the top, and you need to flee quickly when there is no volume at the top. The large volume at the top indicates that the market still has a strong long-term force and may continue to rise for a while; but if the volume at the top shrinks, it means that the upward momentum is insufficient. At this time, you should leave the market as soon as possible to avoid being deeply trapped.
Fourth, do not rush to buy when the bottom volume increases. You can only consider buying when the volume continues to increase. The bottom volume may only be the relay stage of the decline, which requires further observation and confirmation; and when the volume continues to increase, it indicates that funds are continuously entering the market. At this time, you can consider buying to seize possible opportunities for rising.
Fifth, the essence of currency speculation is to speculate on emotions, and consensus is trading volume. The ups and downs of market sentiment determine the fluctuations of currency prices. When market sentiment is high, currency prices tend to rise; when market sentiment is low, currency prices tend to fall. Trading volume reflects the consensus of the market and the behavior of investors. A large trading volume indicates high market participation and strong consensus. On the contrary, it means that the market is relatively deserted.
Conclusion:
In the field of currency circle, which is full of challenges and opportunities, understanding and applying these five laws may help investors better grasp the market rhythm and make more wise investment decisions.
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