OB (Overbought) and OS (Oversold) are conditions where the price can no longer continue its trend because the price is too expensive or too cheap, so the trend can no longer be continued. Unlike support and resistance which are psychological levels that are basically just unofficial mutual agreements between traders.
 
OverBought and Oversold themselves are common and real conditions that occur in the market (not just a psychological matter). When the price reaches the OB or OS point, it is expected that the price will reverse direction and the trend will stop immediately.
 
So when it moves up and the OB point has been reached, the price will return, the uptrend will stop and then be replaced by the currency moving down. Likewise, when the price moves down and then enters the OS area, the price will move up again and the downtrend will stop.
 
Often OverBought (OB) and Oversold (OS) also occur at Support and Resistance points, this is because both are points that are the same, namely the counter trend. However, this is not always the case, of course, the buy and sell decisions will be very supportive if the price is not at these extreme points.
 
Now the question is how to determine the OB and OS points? The easiest way is to use an Oscillator type indicator such as RSI or Stochastic. These indicators are indeed designed to determine the OB and OS points.
 
By paying attention to this, we can estimate when a trend ends and is replaced by the next trend. Thus, we can set the time to open a position even better.
 
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