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| In emotional markets things tend to go past the point of equilibrium that they might need to be. For example grain prices that have gone up fast often turn around and settle back a little. Same for going down. Emotions take them further than the fundamentals suggest is needed.
There are technical indicators call RSI (relative strength indexs) that track how bullish or bearish the market is based on how fast it's gone up or down. Some traders use these as an indicator of when trends are going to change and try to pick the tops and bottoms of movements in price with them. | |
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