June 14, 2010

When Is A Currency Pair Really Oversold?

The trouble with technical indicators, and oscillating indicators in particular, is that although they can tell you when a currency pair is overbought or oversold, they can never be relied on with any great confidence.

For example the RSI and Stochastic indicators could go under 20 and indicate an oversold position, but that does not necessarily mean that you should jump in with a long position. The price could easily keep on falling, and these indicators could stay oversold for many weeks or months.

This is exactly what Adam Hewison, the co-creator of Marketclub, talks about in his latest trading video with regards to the EUR/USD pair. He also goes on to discuss where this pair may be headed in the future and why the recent upwards move may only be a short-term relief rally.

If you would like to watch this short 3 minute video for yourself, you can do so by clicking here.

 

 

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6 Comments on When Is A Currency Pair Really Oversold? »

June 15, 2010

Adam @ 11:46 pm:

I just watched the video. I agree that the euro will continue to decline against the dollar. I think just as we saw tremendous financial turmoil in the US market over the past couple of years, we are just beginning to see the fall of the euro. Greece is just the beginning.

June 19, 2010

Ken @ 8:45 pm:

I must say you have a good site related to Forex,as I also have a site related to Forex,I'd appreciate your thoughts on exchanging links

Regards

Ken

Ken @ 8:49 pm:

I also see you are PR 3 with 20 backlinks,and I am PR2,with over 400 backlinks.

I look forward to you contacting me.

IF you're interested

Regards

Ken

June 21, 2010

Trevor @ 12:48 pm:

All the majors are intentionally being forced towards parity in preparation for global financial reform (meltdown) and introduction of a world currency. Welcome to the New World Order!

June 25, 2010

Dean @ 12:58 am:

Not sure I agree with Adam, although time will tell. I think there may be a little more downside but not much. I use a COT divergence indicator which is suggesting a meaningful bottom is almost in. My only problem is Prechter is calling a top to the US dollar, and usually he is way too early (although having said that, his call for a top in the SPX in April cost him browny points, so he may be right with this one simply because less people will be listening to him now)

December 13, 2011

Kevinfx @ 3:47 pm:

Dudes have you tried linking your mt4 with zulutrade?

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