Identifying the reversal
Money is the most essential things in our life. All the activities that we are doing for this money. So everyone want earn money. People do lots of activities and their daily work for this purpose. In result they are involving in many types of financial activities and investment. Some people try to invest their money to earn more. Share market is one of those. it is a common word for everyone. we know that what kind of activities can be done in this market. This market is related with all types of financial transaction against share. There are basically two types of share market available in the world. One is local share market where people buy or sell their share locally. These types of transactions made by the local residence of the country. And another is International share market. Now a day it is known as foreign exchange. If you are trading in this market then you should be careful about all the transaction you are dealing. Sometimes you may need to do the reverse transaction for your good. In foreign exchange it is very common that people are trading as reversal. Before we discuss about it, we have to know what forex reversal is. It is the action that is taken to change the way of a transaction. This types of transaction made as reverse. There are some facts need to check when someone taking the decision for reverse transaction. Some are given below to discuss.
Change: it is very common that every transaction follow the trail of previous transaction. It also depends on some circumstances. In result trend of some transaction may negative or positive. Investor need to check those things. It may against your expectation.
Price Chart: investor should review the price chart continuously when he or she going to make the move against the transaction. In every transaction there is up and down. The price may vary according to market trend. Then investor can make the reveres transaction.
Correction: Sometime investor makes their move with the transaction wrongly. Their guess may wrong sometime. They can be influence by the information of the market. In some case the affect of that information may low. That’s why investor makes wrong transaction. After the wrong move they went to correct those. So the make reverse transaction.
The downtrend of price chart may can make an impact in total forex. Reversal can reduce the loose of your trade. It can be consider as a winning trade in some case. Sometimes it is very important to identify reversal. First of all segregate the price list with according to your transaction. There are three method of identifying a reversal. Those are given below.
Fibonacci Retracement: in this method there are some level mentioned to review like 38.2%, 50 %. If the price goes down of this level then you can say that reversal is going on
Pivot Points: This works in both uptrend and downtrend. Trader wait for the lower S1, S2 and S3 point in uptrend and higher R1, R2 and R3 point to break.
Trend Lines: It is the last method to identify reversal. If the trend line is going into a breaking position then the reversal may effect.