It is a technique of not following the winner. It focuses on identifying patterns of actions of investors based on subjective feelings. Theory is that, if the crowd leans too much to one side, it is a sign of the coming changes. Traders applying the sentiment analysis hear what investors were talking about and how they react to the market. To find out what they traders think, they carry out a survey and then take the opposite positions.
A technical formation created by a candle with a long upper shadow and a small body located close to the lower levels of the formation. The body can take either the form of a downtrend (usually black or red) or the uptrend (usually white or green) and is a signal of an upward trend.
Selling the base currency of a specific currency pair. The position that is profitable when the market price decreases. In the case of EURUSD, a short position means selling Euros for dollars.
A person knowingly accepting the risks associated with buying and selling financial instruments in order to profit from the provided price movements.
The difference between the buying and selling a currency pair. It is at the expense of the investor at the concluded transactions. In the case of major currency pairs it is usually a few pips. The spread usually has a constant value but in some cases we are dealing with a temporary extension of it, especially before the publication of key macroeconomic data, which, if they prove surprising for the market, can contribute to violent fluctuations.
As the name suggests this is a period in which there is a simultaneous high inflation and economic stagnation. In general, it is characterized by rising unemployment and falling industrial production, while the prices of goods and services grow. Inflation and stagnation drive each other causing further deterioration in economic conditions.
The price level in the downtrend, the breakdown of which is difficult. In the chart, supports can be the previous bottoms, the resistance broken down previously or the uptrend lines.
Open currency positions are subject to automatic swapping to the next working day, if the position is not closed at the end of the day. Swapping is to adjust the position opening price. This adjustment includes swap points due to the difference in interest rates for a given currency pair and the cost of maintaining the unrealized result. Derogations can take place from the standard rules of swapping, for example: public holidays in force in the market concerned by the transaction.