When a certain currency skyrocketed several times and then began to plummet, how to buy the bottom and make money?
I tell you: you have to think about it from the different perspectives of the dealer and retail investors.
Most retail investors like to wait for the currency price to fall by half before buying the bottom. But in fact, during the period when the currency price began to fall from the highest point, fewer people traded, because many people who had previously shorted had been eliminated by the dealer's high-level pull-up, and the remaining people did not dare to enter the market easily.
But if the dealer wants to make money and get out of it, he has to create a large number of trading counterparts. They usually suddenly smash the market while the currency is still hot and retail investors have not forgotten it, and smash the price to a position where retail investors think they can enter the market, and then let the price stay there steadily for a while to attract retail investors to get on board.
In this process, the dealer may make small pull-ups and smashes near the halving price many times. Doing so will neither scare away retail investors, nor let retail investors make too much money and leave, and at the same time attract more retail investors to come in and become the dealer's counterparty.
When the number of people on the bus is almost gone, the dealer may let the price stop there for no more than 24 hours, and then smash the market again, so that the retail investors who have just boarded the bus will be cut in half again. When these retail investors cut their losses, it is the time for the dealer to buy and close their short orders at high prices, which is when they make money.
Therefore, the sideways trading of the cut-off price is very important to the dealer. They have to find a way to attract enough retail investors to ensure that they can exit safely in the next operation and maximize their profits.
Just like what we saw with gas, it plummeted from $28 to around $14, and then it went sideways there for a day, waiting for people to buy at the bottom. As a result, it continued to fall below $9 the next day, waiting for those who bought at the bottom to cut their losses.
Remember, the dealer now holds a large number of chips and short orders. In order to close their positions safely, there must be enough retail investors trading with them. In this way, the fluctuation of the currency price will be small, and they can make more money.
