How do you view the market trend in the currency circle? What is the significance of data analysis on the currency circle?

Investing in the currency circle requires mastering fundamentals and technical analysis. Fundamental analysis determines the investment direction, while technical analysis is more complex, involving grasping the timing of entry and exit. The key to proficient in technical analysis is to learn to look at the market and interpret the trend of the currency price. This article will explain in detail how to interpret technical indicators such as K-line charts, moving averages, and Bollinger bands to help investors better judge the trend in the currency circle.

Currency circle market viewing skills: Interpreting key technical indicators

The core of looking at the market in the currency circle is to proficient in using technical indicators such as candle charts, moving averages, Bollinger bands, relative strength index (RSI), KDJ and MACD to predict future price changes by analyzing historical price trends. The details are as follows:

1. Cannell chart (K-line chart): This is the basic unit of technical analysis. According to the opening price and closing price, it is divided into positive lines (red, closing price is higher than opening price) and negative lines (green, closing price is lower than opening price). By observing the shape of the candle line, you can judge market sentiment and price fluctuations.

2. Moving Average (MA): Curves generated by calculating the average price over a period of time are used to identify trend turning points, support levels, and resistance levels. The price line is above the MA and closely sticks to the MA. MA provides support and is a buy signal; the price line is below the MA and MA forms a resistance and is a sell signal. When the price deviates too far from the MA, it usually returns to the vicinity of the MA. Simple Moving Average (SMA) and Exponential Moving Average (EMA) are two common types of MA, and EMA is more sensitive to new trends. Commonly used time periods include 7 days, 30 days, 120 days, etc.

3. Bolling band: It consists of three lines: upper rail, middle rail (usually 20-day SMA), and lower rail, measuring the overbought or oversold assets. When the price approaches the upper track, it may be overbought, indicating a decline; when the price approaches the lower track, it may be oversold, indicating a rise. The price is near the middle track, which continues the previous trend.

4. Relative Strength Index (RSI): Measures the speed and intensity of asset price changes, with a value range of 0-100, and is usually used for a 14-day cycle. If the RSI is above 70, it is an overbought zone, which may fall; if the RSI is below 30, it is an oversold zone, it may rise. The divergence between RSI and price may indicate a trend reversal.

5. KDJ: Similar to Bollinger bands and RSI, it consists of three lines K, D, and J, with a value range of 0-100. If the K-line exceeds 80 and crosses the D-line downward, it is overbought and may fall; if the K-line is below 20 and crosses the D-line upward, it is oversold and may rise. The J-line is used to confirm the signal.

6. MACD: Judge the price trend turning point and generate trading signals, including three parts: DIF, DEA and MACD bar chart. DIF breaks through DEA ​​upwardly, which indicates a golden cross, which indicates an increase; DIF falls below DEA, which indicates a dead cross, which indicates a decline. The MACD bar chart is at a positive value, indicating an increase; the negative value is at a negative value, indicating a decrease. The divergence between MACD and price may indicate a trend reversal.

The significance of analysis of currency circle data

Corporate data analysis helps investors make smarter decisions, grasp market trends, control risks, and enhance investment confidence. Through analysis, investors can formulate more reasonable trading strategies, improve transaction success rate, and stop losses in time when the market is unfavorable, protecting funds from security. For example, strategies such as trend trading, mean regression trading, breakout support/resistance trading, short-term volatility trading, and regular fixed-quota investment can all assist decision-making through the interpretation of market data.

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