What actually moves prices in forex? Has any retail trader actually thought about this question deep enough.
After so many years struggling and finally turning the corner to profitability understanding this, really understanding this is what helped me the most.
You see as retail traders when we first enter into trading we are lied to, we are lied to by almost everyone(market forecasters who cant trade out of a paper bag- traders who are losing and don't know how to make money and then decide to teach) and so we never really learn unless we are lucky enough to actually interact with a genuine profitable trader and he /she is willing to share their real knowledge. Otherwise we go many years losing and struggling in pain, real gut wrenching pain until we give up or finally realise everything is a lie, you have to throw everything you were taught about trading and restart. It is hard for us to do that we resist for so long until we have no choice.
Some market truths:
Big Money moves the markets (big funds are just one component of the market)
Big money and short term algo funds take advantage of retail traders orders (either to get into a position or get out), this is one of the main reasons retail traders lose money using the strategies they are taught
The number one reason for losses for retail traders is they trade too big for their account balance(causes them to take profits quick and losses run)
Retail traders actually have a huge advantage over big money- we can get into and out of positions easily
The long term price structure is the most important for price direction
Coming back to the title of this post- The chart is an illusion- what matters is where the orders are, big money will always buy/sell at the best price possible or on significant news, they scale in and they will use big stops. (we don't need to trade this way but we should understand that the big guys do). They know us retailers use stops above and below price peaks and troughs, so guess what they almost always push through these levels and get in using ours stops. The best way to see what the market is doing is to watch the reaction of price above and below significant price pivots. The reaction is important in determining the true buy/sell intent of the big guys. Also the big guys build positions over days and weeks - they hold for months and years because they trade so big this is the way they have to trade. You can see which way the big guys are positioned by looking at the cot report, now every time price moves against their long term direction these guys step into support it(but they only do this on deep retraces and favorable prices)- usually during times of low liquidity when it is easier to move the price.
And yes market manipulation is real and happens a lot, news release coming- the news most likely has already been leaked to a few connected people/ funds.
You can help yourself by using ecn brokers to reduce cost, in all my years of trading I found this Broker the best overall for transaction costs but also strong regulation.
I would ask you to read another blog post I wrote as I do not want to repeat it again https://www.mql5.com/en/blogs/post/508679
one of my accounts connected to mql5 https://www.mql5.com/en/signals/366428
feel free to message me - I trade fulltime and usually logged onto mql5