May 5, 2011

3 Solid Questions on Forex Market - Part One

3 Solid Questions on Forex Market - Part One

"The question many ignored, that's why only few survived"

If you know the answer to these questions, you will increase the probability of successful trading.


Why does the market move?

Yes, the market moves up and down. Sometimes it even don't go anywhere.

For trader with fewer screen time, the market may seem like it is moving in random. There is no definite pattern, therefore it is impossible to predict.

But the market has it own reason for every moves it makes. I really like what Henry Liu on said to me in his book. Think of the market as taxi or a cab than a subway or a train.

The price will travel to a place where there are more orders than anyway around.

So, why does EUR/USD move up?

It does so, because the market perceives (think) at any given time that EURO is more valuable that US Dollar.

The real answer is this: Forex market moves because of fundamental news.
Do you really think that the price act based on your MACD or Stochastic setting? If there is no news release, I think the market will go flat.

Nothing to trade, because there is no emotional aspect in trading that will break the support, resistance nor the trend line.

But news release will give us reasons. Reasons for us to believe that a certain currency is more valuable than its rivals.It is so important to understand Fundamental News. Understanding this will give you a bird's eye view on what actually happen on the market.

Result is, you will stay on the right side of the market most of the time.
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About ArrowFX

Technically analyze the forex market mainly on USDJPY, EURUSD and GBPUSD by using market rhythm method started by Philip Nel on Forex Factory. The thread started on 2007 and still alive.
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