Excerpt from: Forex Tips
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| March 10, 2010 | | Today I will go over what I think drives price movement in the markets, why I hold these beliefs, and why I think it is important to understand the forces in price movement. Keep in mind the following theories are my opinions, not absolute fact. I believe | |
People often ask "did fundamentals trump technicals on that trade?"
or something along those lines. No offense to anyone out there, but
that is a ridiculous question. There are not two boxers names
"fundamental analysis" and "technical analysis" slugging it out for
trading supremacy. Sometimes a major news announcement will shoot the
price past a strong technical level, but that's why I don't enter
trades right before a major news announcement. How do we measure
"fundamentals" though? Does that mean an announcement today, the
overall economic scope of a country over the past century, or something
in between?
The reality is that the only force that moves prices in any market
is the buying and selling of the financial instrument. For our
purposes, we will use currency trading as an example, but this is true
in all liquid, openly traded markets. Currency prices don't fluctuate
on their own. They only move up when traders are willing to buy at a
price higher than the current price, and the only move down when
traders are willing to sell at a lower price. That sounds incredibly
simple, but this is a very important fact to establish.
Full Story - FX360
| Topic Tags: analysis, fundamental, move, technical, trader, traders | |
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