Hello guys.(Sorry for bad English) I’ve been reading the lessons in school of Pipsology
and these things really confuses me . have a look.
1_behind the trend lines, double tops, and head and shoulder patterns, there is a fundamental force behind these movements.The news is important to the forex market because it’s the news that makes it move.
Regardless of the technicals, news is the fuel that keeps the forex market going!
2_With currency trading, the massive size of the forex market makes the likelihood of anyone fund or bank controlling a particular currency very small.
The FX market is sufficiently liquid that significant manipulation by any single entity is all but impossible during active trading hours for the major currencies.
But is the lesson ‘‘trading Fakeouts’’ the writer wrote this:
The smart minority tends to be comprised of the big players with huge accounts and buy/sell orders
This usually is caused by the institutional traders who want to scrape money from the hands of individual traders
It’s about the time that a pattern like head and shoulder formed but the price went is the opposite direction because of the institutional trader .
After all what makes the market and prices change ? news or traders with big pockets ?
The institutional traders working for the big international banks are not out to take money from private retail traders. We are so small they do not even see us. They compete with their competitors, other big international banks.
Relationships are often not straightforward and can be quite tangled. Millions of people participate to trading even big players they are independent so they set different goals. Some of them are bears, some of them are bulls. Graphical patterns from TA are just statistically stable manifestations of price action also they are deemed to be a guide for traders which focus on that patterns so their actions become similar.
Demand and supply. Every pip move in the market is as a result of the forces of demand and supply. Fundamentals/news is just an excuse the traders use to make the moves they were already going to make
Don’t agree with both replies… that means, we can ignore the market sentiment?!?.. Big boys know exactly where the majority retail traders are with their stop losses. That’s why the whole educational forex subjects are misleading. How do you explain sudden spikes while there’s no fundamental event? 5.4 trillion daily and the big boys are only in a game? Don’t think so…Retail traders are there to create enough market move for them and they all hedge against retail traders. If only big players are playing, they would be in no men’s land, stuck in status quo… I can go on and on…become institutional trader, then we can talk…
As of 2016, the major players in forex comprised 94.5% of the daily turnover of the forex market in capital terms. Remember that we private retail traders don’t even trade currency, we speculate on currency exchange rates. No big bank is going to buy up Pesos to shake out some guys trading a thousand bucks a time from cheap laptops in coffee bars.
There are spikes. That doesn’t mean the big banks design them and aim them at us.
It is blind to say that without retail speculation exchange rates would flat-line.
It is also generally accepted that the vast majority of retail positions are counter-partied by the broker and never even reach the actual interbank market. In which case, if the banks were really to indulge in stop-hunting they would only be benefiting the brokers, not themselves.
I don’t really think there is any point in talking about “retail” and “professionals” when thinking about what moves the markets. A more meaningful classification is “speculative” and “commercial”.
It is clear and evident that there is a huge speculative element in price movement simply because on days when there are high-profile events (like NFP) the markets move. But when certain important markets are on holidays, the markets are lacklustre. It does not matter whether these are primarily retail or other. In any case, the retail market is not some kind of homogeneous whole that is always in the market and always in the same direction as everyone else. It is a mix of players.
But then there is the huge commercial input. Participants who buy/sell currencies as part of the business. Virtually all international trade is priced in major currencies and most countries need to deal in currency transactions. Similarly international firms move currencies around the globe. Then there are the big investment/pension funds, adjusting their portfolios according to a mix of currency price and returns on investment.
Then there is also a growing input from automated trading systems that act/react on a substantial basis whenever signal levels are triggered.
It is certainly the speculative element that causes most of the spikes and that is increased by the extensive use of technical analysis that pulls others into the move as it progresses. But because there is no substance underlying the move, there is a rapid reversal at some point that makes it a spike instead of a change in direction.
But the actual composition of the speculative element is immaterial. And the players in it are not targetting one another, they are just looking for a move and a profit. Who their counterparty is on entry and exit is irrelevant to them. The forex market is impersonal.
[quote=“TBWPEX, post:1, topic:494886”]
It’s about the time that a pattern like head and shoulder formed but the price went is the opposite you might have seen a head and shoulders “someone else” might have seen it as something else
There is little misconception about fundamental analysis: you try to predict further development of fundamental events based on fundamental information you have, not reaction of price to fundamentals (as your are likely to be late with your bet, there are many algos which trade news with lightning fast speed).
Market moves on many macroeconomic factors and also on demand and supply of a pair traded on forex. Value of currency is affected by trading sentiments as well as economic indicators. It takes into account not only the performance of the economy of one country but the entire world.
We should understand this fact that if we are having the required Trading Skills with us then we would be able to get income from our trading with SUCCESS
