Can you tell when the currency is overbought or oversold?

Quoting mathematician

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Well, basically the term overbought means it’s priced “too high”, higher than it “should” be.

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Quoting mathematician

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Well, basically the term overbought means it’s priced “too high”, higher than it “should” be. People are buying it at prices above what you would expect for the currency/stock/commodity, etc. But if people are buying it at high prices, that means others are selling it at high prices (the ones selling it to the people who are buying). So why don’t we call it oversold? Again, it comes back to having an idea of what it “should” cost. If it’s above that price, people will call it overbought, below that, and it’s oversold. So in order to determine if...

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Quoting yaed

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No.

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Quoting Ryan420

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{quote} 2nd this. Current price (tight spread) is the price at equilibrium. Historic prices have no influence on future price.

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Quoting slb

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We never know and the best we can do is take a guess. The key to the enigma is to keep trying, when our strategy, whatever it may be, seems to indicate overbought or oversold. Managing risk to control our money and be able to accept losses, because that big win can come at any time. Cheers

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Quoting pizd0s

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{quote} Second approach is try to predict some important in terms of market impact events. Can be considered as fundamental analysis though. Like economic report outcomes, Fed decisions etc. If you are consistently good at those predictions you can expect to profit from " surprise" in the data.

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Quoting Tonsil

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Here's something I put together {image}

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