What actually makes the market move?

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).

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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.

Thanks for dropping gems and things to think about

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 :slight_smile:

Yes, you are right. I agree with you.

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market players are not all in the market for profit, there are the commercials, and the non commercials , non commercials are the speculators, those are in to make money.

So much of what @SovoS said I agree with.

I think “what makes the ocean move?” is the wrong question. For example, according to NOAA:

Ocean currents can be caused by wind, density differences in water masses caused by temperature and salinity variations, gravity, and events such as earthquakes or storms. When a current that is moving over a broad area is forced into a confined space, it may become very strong. On the ocean floor, water masses forced through narrow openings in a ridge system or flowing around a seamount may create currents that are far greater than in the surrounding water.

sigh…fundamentals

I think the right question is “what actually affects currency valuation?” We’ve got to always view this as if we’re trading the difference in value between two dynamic instruments that happen to be central bank currencies. The things that actually move currency prices? We all know those. Interest rate changes wear the crown, Fed actions like stimulus(QE-type-stuff), govt (non-fed) market interventions, non-farm payroll and unemployment, various baskets of goods reports, government instability, natural disasters, etc.

The biggies in the market are doing things like serving international corporations who want to buy currency options contracts to hedge against loss from exchange rate fluctuations between their HQ and overseas sales operations. Even positions of that size are by design to accommodate the currents of this ocean that is Forex.

Us retail traders are riding jet skis in the open ocean trying not to fall off and drown

Just my 2 cents :slight_smile:

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Nice analogy! :smiley:

Demand and supply move the market prices clearly. Buyers and sellers make the forex prices. We as a retail traders have zero impact on the market. Institutional traders or large banks have a market impact and we should study their market behaviour.

Volatility and the trading of supply and demand of currency pairs when someone buy or sell them.

its the liquidity or you can say the numbers of buyers and sellers

Yes,the only one thing that moves price in all markets is the liquidity, how many lots or shares are opened or still opening in buy side or sell side. Then price simply moves against it.
For ex; if there are 5000 lots on buy side,makret will fall down until they close all buy positions,the reason is simple.

Well, it’s several things moving markets such as news, etc, especially political news. It controls global economies heavily.

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There is little misconception about fundamental analysis: you try to predict further development of fundamental trends based on the 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, consume and process market moving information much faster). However sometimes I trade NFP using simple news straddle algo with Hotforex and if I’m first in the order queue (sometimes it happen) the trade is an ease gain!

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Sounds great

Political news hugely impact forex market so forex traders are constantly monitoring political news and events to predict changes in the economic policies of national governments.

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They move in reaction to all the supply and demand, interest rates, government policy, economic health and many other factors.

The market makers move the market. These are big investment banks.
That is why when trading, you need to follow the big money. Trade with them and you will be profitable.
Retail traders have zero influence.

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Correct! Always trade with stop losses, because we are not investment banks. LOL

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the big banks and the institutional traders market sentiments

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