What does short-selling in the currency circle mean? A popular introduction to short-selling in the currency circle

Short inducement means that market makers deliberately sell currencies to create panic, inducing retail investors to sell at low prices in order to buy at low prices. Ways to identify short-selling include: the appearance of huge sell orders, currency prices falling and failing to reach support levels, abnormal trading volume, panic in market sentiment, and market makers buying at low prices. The purpose of short-selling is to buy at low prices, shock the market, and make profits. The coping methods are: adhere to trading discipline, set stop loss, pay attention to trading volume, remain rational, and use take-profit orders.

What does short selling mean in the currency circle?

Short inducement means that bookmakers or large investors deliberately sell a large number of currencies to cause market panic and attract retail investors to sell at low prices, thereby achieving the purpose of taking advantage of the opportunity to buy at low prices.

How to identify shortfalls?

• Huge sell orders appear: A large number of sell orders suddenly appear, driving down the currency price.
• The extent of selling is unreasonable: The currency price has fallen seriously, but has not reached the support level or bottom line.
• Abnormal trading volume: The trading volume of sell orders is large, but the trading volume of buy orders is small.
• Panic Market Sentiment: Social media and forums were filled with panic and retail investors started selling.
• Buying at low prices by bankers or large traders: When the currency price drops to a certain level, buy orders from bankers or large traders will appear.

What is the purpose of baiting?

• Buy low: Bankers or large investors induce retail investors to sell at low prices by creating panic so that they can buy at low prices.
• Shock the market: Market makers often use short selling to create market fluctuations, thus disrupting the trading behavior of retail investors.
• Profit: Bankers or large traders can make profits by buying low-priced coins and selling high-priced coins.

How to deal with the temptation?

• Adhere to trading discipline: Don’t be affected by panic and stick to your trading plan.
• Set stop loss: Set stop loss to limit losses and prevent heavy losses during the short-selling process.
• Pay attention to trading volume: Don’t just look at the currency price, but also pay attention to the trading volume. Abnormal trading volume may be a bearish signal.
• Stay rational: Stay calm and rational when market sentiment fluctuates, and do not blindly follow market sentiment.
• Use take-profit orders: Set a take-profit order to lock in profits and prevent losses in a short-induced rebound.

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