What does it mean when you say "oversold" or "overbought"? how can I know if a currency is in this situation, and what should I do after I find out?Thanks!
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What does it mean when you say "oversold" or "overbought"? how can I know if a currency is in this situation, and what should I do after I find out?Thanks!
Dislikedoversold and overbought are just technical descriptions of market action based of some indicators...don't take it too seriously...
this article might explain it...
http://www.dailyfx.com/forex/educati..._Oversold.htmlIgnored
It's a way of trying to make reality fit in with expectations.
"Oversold" and "overbought" are artificial concepts constructed from technical analysis parameters (particularly those raised by so-called "oscillators" like "stochastics").
These terms are conceptually perhaps on a par with such sentiments as "If the facts don't fit the theory, change the facts", in that they're a sign of beliefs being respected as if they were realities. (That's true of quite a few things, in forex trading, really, isn't it? ).