The only way for the price to move up is when there are buyers who place orders at 1.5000, but this order is not confirmed yet. so it doesnt move price.
But say for the price to move up, when there are buyers who long at 1.4492, and there are people who sell at that price, then the price would be at 1.4492.
vice versa for short.
So if a big boy come into play and place 102932123 volume on 1.4492 and there are only few sellers in 1.4492, the price would still stay at 1.4492 because no one is selling and their order is not confirmed.
so how then, the price would rocket up?
can someone explain all this in detail or post a website which explains the mechanics.
I only know for stocks when someone send a contract saying ur stock NAV is supposed to be $20 when now its only $10, and when they buy the stock from him, the stock market automaticly values it at $20.
The buyers and sellers you see on retail accounts don’t move the prices.
We are incidental being roughly 2% of the total exchange daily.
The price comes from the servers at each central bank governing each currency,
The price moves from their servers to each brokerage house.
That"s why from broker to broke the value is very close to the same. The charts vary just a tad because the “last” may be a pip or two different as the sellers and buyers won’t be in unison on each broker’s charts. The longer time frames however will be almost identical.
Big boys don’t play on the retail level.
You see the price move as the big boys play behind the scenes.
Big boys being countries swapping currency, big banks selling or buying millions at a time, and so on.
Factor in other commodities, and metals changing in value as well.
Say gold goes up 50 bucks. The dollar will go down, and the Euro will go up.
The automated system moves the value accordingly, and you have price action.
Say you place an order to buy at 1.4420 and your order is filled. You then place a limit at 1.4470 50 pips above your entry.
As the price moves up, your limit order stays stationary. When the value of the Euro meets your stationary order, it unites your sell order with a buyer.
Sorry Master Tang, but the prices for forex exchange rates do not come from the central banks in any meaningful way for the freely traded major currencies. The CBs can certainly influence prices through intervention and other actions, but they do not in any way set them for the market. Market makers in the inter-bank market are the main drivers of exchange rates.
And to EdgarNG, prices move for two reasons.
One is the action of buyers and/or sellers. As buyers come in and execute against existing offers they will see the lowest available offer rise. For example, say there’s 10 million on offer at 101. If 15 million comes in to buy against those offers, the 10 million will be taken out and the next 5 million will get filled against offers at the next higher offer level - say 101.05.
The other way prices move is the withdrawal of buyers and/or sellers. For example, if there is 10 million on offer at 101 and all those offers are withdrawn, the market offer then becomes the next higher offer - say 101.05.
Now, having said that, the market makers are constantly moving their bids and offers to find the volume. They make their money by taking the spread on as much volume as they can, so it behooves them to price exchange rates at levels where the most volume will be done.
It may not be a central bank per se, as the control of money varies from country to country. But whatever the governing body that issues monetary policy in a given nation, provides it’s most current exchange rate. They assimilate the information, and process it, as institutions, countries, and us little guys buy, sell, and borrow. The value fluctuates accordingly.
They can’t push a magic button and change the value, they have to do it monetarily.
Want a higher dollar price? Raise interest rates. Want a lower dollar price? Add cash to the system. Then account for it all, and change the value worldwide accordingly.
It has to start with the CBs. Otherwise it would be a chaotic mess.
From there quotes do vary from broker to broker, as the market makers for brokerage firms have a hand in at that point. But they are fixed around a provided value at any given moment.
Yes that an interresting question. But also, does the money is what is really buy/sell ?
or the money movements are just a consequence of the real market activities ? I mean exportations, metal, company stock ect… ?
The bank winning more in commissions done, not in the money itself. The big move are just normal following country economic activities, this is why we can easy establish a correlation between the TOPIX and the XXXJPYs
“We know that prices move up and down. They always have and they always will. My theory is that behind these major movements is an irresistible force. That is all one needs to know. It is not well to be too curious about all the reasons behind price movements. You risk the danger of clouding your mind with non-essentials. Just recognize that the movement is there and take advantage of it by steering your speculative ship along with the tide. Do not argue with the condition, and most of all, do not try to combat it.”