How to grasp the resonance of foreign exchange market
Resonance is a very common phenomenon in foreign exchange transactions. In Gann's theory, when there is a multiple relationship between the internal fluctuation frequency of the market and the driving force frequency of the external market, the market will have a resonance relationship, which will lead to the market moving up or down sharply. This theory has been further demonstrated in foreign exchange transactions. When you open the chart of foreign exchange market, you can find that the market trend often fluctuates greatly. Once it breaks through the low position, the exchange rate is like a runaway wild horse flying upward; Once it breaks down from a high level, the exchange rate is like a river that breaks its banks. This is the image reflection of the resonance effect in the foreign exchange market. In the foreign exchange trading market, there are four main factors that resonate with the market, and speculators should understand. 1. Fundamental resonance: that is, based on economic data, interest rate level and major political and economic events, it is concluded that a certain currency will rise or fall, and this basis is put into the market for verification. If the market is verified in the right direction, then the current trend will be supported by fundamental resonance and the original judgment can be adhered to. 2. Multi-period resonance: We judge by the synergistic resonance of multi-period technical system, that is, the trend, shape and index with price as the core. When long-term investors, medium-term investors and short-term investors buy or sell in the same direction at the same time, there will be upward or downward power resonance; When the long period, the middle period and the short period in the time period meet at the same time point and have the same direction, they will produce upward or downward resonance in time; When the long-term moving average, the medium-term moving average and the short-term moving average meet at the same price and have the same aspects, there will be resonance of cost upward or downward; When K-line system, moving average system, KDJ indicator, MACD indicator, RSI indicator and other technical indicators all send out buy or sell signals, it will produce technical multi-cycle resonance. 3. Multi-currency resonance: judging the multi-currency resonance through the cross disk and finding the currency with the strongest trend can capture the trend of international mainstream funds, then this currency is the strong focus of the current foreign exchange market, and what we want to do should be the variety that international mainstream funds pay attention to, so that the income is both safe and guaranteed. 4. Foreign exchange market resonance: With the integration of global economy, there will be horizontal linkage effect between currencies in various markets. Through the synergistic resonance of multiple markets, we can greatly improve the accuracy of analysis and judgment. For example, if we want to analyze the US dollar, we should also pay attention to the relevant market trends, and see how Dow Jones and NSDAQ go, how gold prices go (seesaw effect), crude oil trends, bond markets, futures markets, interbank lending rates and so on. Through multi-markets, we can verify whether the trend of the US dollar conforms to our judgment. This greatly improves the reliability. It can be said with certainty that if all the above four aspects support the rise of a certain currency and all of them have a synergistic resonance, the probability of the currency's rise can almost reach 100%, and if one of them is uncoordinated, the probability of appreciation will be reduced. This is the main method to measure risk. As can be seen from the above analysis, the occurrence of resonance is conditional. When these conditions are met, resonance can occur; When the conditions are not met, resonance will not occur; When certain conditions are met, resonance will also occur, but the effect is small; The more conditions of resonance are satisfied, the greater the power of resonance. Resonance is a resultant force, a force that occurs simultaneously and pushes in the same direction.