trade price response

Definition

Forex

  • The use of the reaction of an asset's value when a key technical level, usually support or resistance, is attained to set up a transaction. For example, a forex trader operating in AUD/USD might watch the trade price response of the exchange rate when it trades at the key 1.0000 parity level. If the market was trading above that level, but just slowly returned to test it, the trader might buy the pair. On the other hand, if the market crashed through it on high volume, the trader might sell.
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