Technical analysis in the forex market

Difference of top and bottom


The trading range should be wider when the market rates are bigger because the market rates moves in line with the return to get from the market. Compare the price of apples when it costs 100 and 150 respectively with 200 Yen you have. In proportion to the price increase, you cannot buy more apples than before. If you expect the same internal ratio of return, the trading range should be wider to compensate the higher price. Your 200 Yen apple cannot get the same earnings from the 100 Yen apple unless the double movement could be expected.

In this way, there seems somehow difference in forming between the top or the bottom from a return viewpoint. Around the top, the forex market moves dynamically and the time to stay there is quite short. The professional forex traders try to aim the reversal point at the top as well. Unlike individual investors, the professionals costs for funding, which urges them to the short term forex trading. In this way, the downward movement runs faster than the upward movement as you can see.


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