Detecting Buying and Selling Territories in the Foreign Currency Exchange Market

The foreign currency exchange market is known for its unpredictability, making it a challenging environment for traders. The possibility to forecast with a certain degree of accuracy the directions of future price movements is a key component of successful trading. This paper presents a financial model, based on novel trading strategy. This strategy combines technical indicators, such as Moving Average and Relative Strength Index, which are calculated based on historical market data. Based on these technical indicators, buy and sell signals can be generated. These signals help define buying and selling territories within the data. As a result, the proposed financial model can identify potentially profitable trading opportunities, which can be applied in the foreign currency exchange market.