Price movements in the forex market occur because there is demand and supply, as long as there is demand and supply, the data will move according to the interests of market players. When a demand or bid has decreased interest from market participants. The terms used in the world of forex and stocks are saturation or overbought and oversold points.
Oversold itself is a condition in which stock prices on the exchange have experienced selling pressure several times and have reached their saturation point or lowest point. It is at this point that the stock price holds, and consolidates to reverse its direction back up. Meanwhile, Overbought is the opposite of Oversould, which is a condition in which the stock price has increased significantly and reached a saturation point due to considerable buying activity.
Does price really have a saturation point?
In my opinion, the actual price does not have a saturation point. As long as the market players are interested in buying or selling, the price will move according to the interests of the market players. Until when will this interest end? Market participants' interest will end until market participants think it is enough to get a profit. This means that the interest of market players cannot be predicted with certainty, therefore in the world of trading in particular, no one can predict perfectly regardless of the method of transaction, because the interest of market participants cannot be determined by the indicators used by traders. Therefore, traders use proper risk management to deal with market participants' interests that cannot be predicted by anything and anyone.
So how to determine the saturation point of the price?
As explained above, that basically there is no saturation point, what exists is the interest of market players who move prices because there is demand and supply. If you look at the trader's pattern to determine the saturation point, there are several ways that are used, even though it is actually not objective. Some of their diantra uses the Oscillators indicator, some are using the value from the average range and some are looking at resistance support.
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