Turncoat support in forex trading is a technical analysis concept that refers to the point at which an asset’s price has dropped to a certain level and then reversed direction. This reversal of direction is referred to as “turncoat support” because it implies that the asset’s price has “turned coat” from falling to rising. In this blog post, we will discuss what turncoat support is, how it can be used in forex trading, and provide examples of turncoat support in action.
Turncoat support is a technical analysis concept that refers to the point at which an asset’s price has dropped to a certain level and then reversed direction. This reversal of direction is referred to as “turncoat support” because it implies that the asset’s price has “turned coat” from falling to rising. The term “support” refers to the idea that when an asset drops below a certain level, there are buyers who are willing to buy up those assets and prevent them from dropping further. This buying pressure can cause prices to reverse course and start rising again.
Turncoat support can be used by traders as an indication of when they should enter or exit trades. For example, if an asset drops below its turncoat support level, traders may view this as an opportunity for them to enter into long positions (i.e., buy). Conversely, if an asset rises above its turncoat support level, traders may view this as an opportunity for them to exit their long positions (i.e., sell). Traders may also use turncoat support levels as targets for stop-loss orders (i.e., orders placed with brokers that close out trades once they reach a certain predetermined price). By doing so, traders can limit their losses if prices continue moving against them after they have entered into trades or taken profits on existing ones.
Let’s look at some examples of how turncoats supports have been used in real-world trading scenarios:
• In April 2020, the EUR/USD currency pair dropped below its 200-day moving average – which many traders consider a key indicator of trend strength – before reversing course and climbing back above it again shortly thereafter (see chart below). This was seen by many traders as evidence of strong underlying demand for EUR/USD despite short-term volatility caused by economic uncertainty related to COVID-19 pandemic fears at the time;
• In August 2019, gold prices dropped sharply after reaching their all-time high before quickly bouncing back up again due largely in part due investors buying up gold on dips;
• In July 2018 oil prices plummeted after reaching their highest levels since 2014 before quickly recovering due largely in part due OPEC announcing production cuts later that month;
• In December 2017 Bitcoin experienced a sharp drop followed by rapid recovery after reaching its all-time high near $20k per coin;
In conclusion, turncoat supports are important technical analysis concepts for forex traders because they provide clues about when markets may be turning around or where potential entry points might exist for entering into new trades or exiting existing ones with minimal losses incurred along the way. While these concepts should not be relied upon exclusively when making trading decisions – other factors such as macroeconomic conditions should also be taken into account – understanding how these concepts work can help you become a more successful trader over time.