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Technical indicators refer to a series of data points used to predict currency price movements


In the technical analysis process of foreign exchange trading, through the principle of trend analysis and the principle of morphological analysis, especially by analyzing the support and resistance levels of exchange rate fluctuations, it is easy to judge the key price limit of the exchange rate trend, but when the exchange rate Whether it will break through after reaching this price point becomes a problem that is difficult to grasp. Therefore, the technology of foreign exchange trading also needs to use various indicators to analyze and judge to improve the accuracy and reliability of future market price forecasts. Generally, the technical indicator of foreign exchange trading is a mathematical calculation of the price or volume of foreign exchange transactions. Using this value can predict the trend of the exchange rate. Of course, these indicators sometimes provide the right trading signals, but in other cases they will send out the wrong signal. Therefore, they should be treated differently when they are used. They should not blindly superstitious technical indicators. The technical indicators only record the changes in the previous exchange rate. The analysis of technical indicators is only one of the analysis and forecasting tools for future exchange rate trends.


In the foreign exchange market, technical analysis indicators can be divided into three basic types:


I. Financial indicators


Mainly there are interest rates, money supply, consumer and corporate debt, inflation rate, etc. They determine and influence the economic environment of the foreign exchange market, which is the basic analysis indicators of foreign exchange transactions introduced above.


Second, emotional indicators


There are mainly the size of sporadic transactions (indicating what the smallest investors are doing), the buying and selling ratios (indicating how many people are buying and selling), the Bull and Bear Analyst Index, etc. “Reverse Operation” investors often use emotional indicators to predict most investors' expectations of prices, and then take the opposite behavior. The basic idea is that if everyone thinks the price will rise, there may be no investor push. The price has risen further, that is to say, “At the bottom, everyone is a bear; at the top, everyone is a cow.”


Three, trend indicator


There are mainly MACD indicators, RSI indicators, DMI indicators, etc., through the mutual cooperation of price, volume and price to judge the trend of the foreign exchange market.
Momentum Models are an evolutionary model from the moving average method. The basic principle is exactly the same as the moving average method. It reflects the difference between the two moving averages or their ratio. In the rising market, the short-term average line will be higher than the long-term average, and the difference momentum indicator will be larger than the positive value at zero; on the contrary, in the down market, the short-term average is lower than the long-term average, and the difference is lower than the long-term average. Line, the difference momentum indicator will be negative. The more low, the greater the negative value of the indicator.