Trade Price Response
Technique used by foreign exchange traders which involves the close study of a specific security's past performance using information gathered in an in-depth analysis. Traders will carefully examine how the security performs at varying specific prices, allowing them to predict the best course of action to take regarding that security once it hits a certain price again. An example would be a foreign exchange trader taking a long position once a security breaks through its traditional resistance level, in expectation that its value will continue to rise. However, should the security not Break through the resistance level, the trader would be more likely to take a short position on the security as a hedge.
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