Oversold and overbought levels in Forex show the price of a currency about its real value. Any trader should understand how to identify these levels as it's a crucial part o trading any asset. In general, an oversold asset has a significant loss in its price and is expected to grow, while an oversold market has risen and will go down in perspective.
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Is it good to buy an oversold stock? Of course, it sounds great. However, sometimes the difference between an overbought and oversold asset in the Forex market is not so obvious. That's why professional traders should be well-versed in these concepts, as they directly impact your profit.
The ability not to lose your investment is not everything you need in Forex. Another important factor is the capability to gain and, most importantly, maintain your profit.
Do you know anything about Charles Dow? Is Dow theory a good choice for Forex trading? Nowadays, many traders still use Dow signals to make money, so this article can help you understand the Dow Forex theory.
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