Breakthroughs in the stock market can often bring confidence to investors. What is the breakthrough of the trend line in the foreign exchange market? I believe that when initially learning the basics of foreign exchange, foreign exchange speculators seldom pay attention to the breakthrough of the trend line. Today, the author brings you the significance of the breakthrough of the trend line, hoping to help some foreign exchange speculators to answer their doubts.
Generally speaking, what kind of breakthrough is the real breakthrough? The answer is the closing price. After a lot of analysis and research, the author found that the closing price breaks through the trend line, which is an effective breakthrough and thus a signal to enter the market.
Take the downward trend line, that is, the anti-pressure line, as an example. If the market price has broken through the anti-pressure line, but the closing price is still lower than the anti-pressure line, it proves that the market did try to go higher, but the buying orders did not continue, and the selling orders rushed in. Until the exchange rate finally fell back at the market close. Experts believe that such a breakthrough is not an effective breakthrough, that is to say, the anti-pressure line is still valid, and the weak trend of the market remains unchanged.
What are the principles for foreign exchange speculators to judge breakthroughs? In order to avoid mistakes in entering the market, technical analysis experts have summarized several principles for judging true and false breakthroughs:
A. After discovering a breakthrough, observe for one more day
If the exchange rate continues to develop in the direction after the breakthrough for two consecutive days after the breakthrough, such a breakthrough is an effective breakthrough and a safe time to enter the market. Of course, it will be entered into the market two days later, and the exchange rate has already changed a lot: the exchange rate that should be bought is higher; It is much better to rush into the market.
B. Note the high and low prices two days after the breakout
If the closing price on a certain day breaks through the downward trend line (resistance line) and develops upward, if the trading price can exceed its highest price on the next day, it means that there are a large number of follow-up buying orders after breaking through the resistance line. On the contrary, when the exchange rate breaks through the upward trend line and moves downward, if the next day’s trading is carried out below its lowest price, it means that after breaking through the support line, there is a lot of selling pressure and it is worth following up and selling.
In the foreign exchange market, the breakthrough of the trend line is very important for the timing of buying and selling. Even market makers often take market operations according to changes in the trend line; To make a breakthrough, whether it is an effective breakthrough or an ineffective breakthrough, is very important to investors.
The above is the introduction of the principles of judging breakthroughs, I believe you are already very familiar with it.
