I’ve read where there are buyers or sellers active on a certain currency pair. What affect does buying or selling a currency pair have on the upside or downside of that pair?
Nothing but be sold without a buyer. Nothing can be bought without a seller. Forex is a zero sum game. Your question isn’t really a question.
It is a good question. I just need an answer from someone who knows the trading business.
When a commentary or news release states that a currency is being bought or sold heavily, it must mean something. How does it affect the ups and downs of the currency pair being bought or sold?
Buy low. Sell high. Buyers raise price. Sellers lower price. The price moves where the most buying and selling will occur. If the price is too high, you won’t have enough buyers. If the price is too low, you won’t have enough sellers.
Your answer isn’t really an answer. It’s pithy, but doesn’t address the simple mechanics of the market.
Market makers and others have orders in the market. When buyers come in they lift the offer. That term has a specific meaning. By buying at the offer price the buyers, eventually with sufficient volume, overwhelm the orders there. That means the next highest sell order become the offer. Thus, the offer is lifted to a higher price. Market makers will keep the spread in line by also raising the bid level. The same thing happens when sellers come in and hit the bid.
Price makers (those who have standing orders in the market) set prices in the immediate term, but price takers (those who execute market orders) create price movement.
Thank you for your answers.