The difficulty in speculation is to distinguish between a long, short or consolidation situation.
Therefore, we should not only accumulate experience and improve our knowledge, but also constantly learn and judge the fundamentals and techniques.
Under a floating system, there are only three moves in any one, namely, up, down and sideways.
In the year, consolidation accounts for about 70 to 80 percent of trading days, with the remaining 20 to 30 percent in the long or short market.
In a consolidation market, investors should first distinguish the range of consolidation, and then sell in the upper range and buy in the lower range, which is called buying low and selling high, in order to make profits without too much risk.
If investors can properly implement the stop-loss strategy, they can even increase the amount of investment in order to get a bigger profit.
But most people in the market still want to catch the 20-30% long or short market in time and operate on the trend.
The main reason is that the profit of the homeopathic operation is very considerable, and the number of stop losses is small, so the extra cost is greatly reduced.
Moreover, homeopathic operators are implementators, not inventors.
However, there are two problems in actual trading: one is how to distinguish between a long market, a short market or a consolidation market;
First, “operating against the trend” is an extremely difficult human weakness to overcome.
Overcoming human frailty can usually be achieved by accumulating experience and increasing knowledge through loss;
As for how to distinguish between a long, short or sideways market, it must depend on fundamentals and technicals.
For the operation of investors in the foreign exchange market, whether buyers or sellers, the basic premise should first predict the future price of the investment target, and then determine the investment strategy and operation direction according to the prediction.
What fundamental analysts consider strong or weak reflects how good or bad a country’s economy is.
Although its strength may fluctuate temporarily due to the disturbance of other non-economic factors or produce trends contrary to the structure of the economy, in the long run its price will eventually recover to a level commensurate with the economic situation.
As for how to measure the state of the economy, we need to take a relatively comparative approach.
Data reflecting economic conditions, commonly known as economic indicators, include many other indicators besides economic growth rate, such as trade deficit, budget deficit, volume, consumer price index (retail price index), producer price index, unemployment rate, housing starts rate, leading indicators, etc.
As fundamental analysts bet on the focus of the relevant government departments will be regularly released a variety of data.
Such investors will collect and analyze various data for further analysis and comparison as a basis for judging the future trend of each trend.
Is this analysis and prediction correct?
What’s the effect?
Look at international investors.
They set up an economic research department to analyze the economic conditions of major countries.
Market investors will first close or lower their foreign-exchange positions ahead of the release of key economic indicators from the U.S. and other government agencies.
The foreign exchange market took on an air of facing an enemy, and bank managers waited all night.
Fundamental analysis does have a decisive impact on the foreign exchange market, as can be seen from the survival situation after the release of economic indicators.
After economic indicators are released, the currency may be strong or weak;
The weak can be weaker or stronger, which is true of “economic indicators as market drivers”.
How can we ignore these factors?
Thus, whether or not fundamental analysis is correct in predicting future trends, it has indeed long become the standard for investment decisions by market participants.
The dollar rose to a one-week high and gold fell below 1,770 ahead of the Fed rate decision.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
