I’ve read that big financial institutions deliberately do this? but why?
As for me this is the trickiest part of forex. It’s like a bomb in your backpack that’s going to explode anytime soon.
There are time that you’re just riding on the trend earning profit already and a deep pullback occur covering like 4 previous bars and your stop loss got hit.
No it doesn’t. Just more marketing bull on YouTube. But I’m not here to argue with you trendy.
@matzhee. Take what you will from this video but remember these points
While retails traders provide 90% of all transactions, we only provide 5% of the volume.(% indicative only)
We’ll never know where institutions transact or the volume they do.
Nobody is hunting stops. Especially yours and mine.
It takes stupidly huge amounts of money to manipulate the market.
Why do these deep pullbacks occur, its called a correction because,institutions, for all the resources and money they do throw around get it wrong like us.
Finally about YouTube. Would you let a mechanic work on your car because he has watched a YouTube video. How about a doctor, would you let him preform surgery? You not going to learn anything from YouTube. There is just to much marketing filth to filter through.
If they are wrong in a certain position and wanted correction, wouldn’t the wiser thing to do is ride on the trend instead of opening position against the trend?
Banks, hedge funds, central banks. These guys are the underlying market and they certainly don’t trade to speculate. The market is there because someone, somewhere needs to exchange currency. They profit from the exchange not from price difference. What we provide as speculators is volatility.
Maybe using the word wrong is misleading. Think of it as a clearance sale. If the bank/s build up excessive stock they need to dispose of it. Its called inventory management. They are not losing money doing so. Just balancing the books.
It makes the trend more strong. By doing so Big Money shake the weak leaves of the tree. Like if you want to jump high, first you have to go back few steps. If you try to jump by standing still, you won’t be able to jump high. You can also say it takes fuel so that it can run more.