Why does the price move? The answer is here!!!
It was a long time ago when supply and demand controlled the price. One trader said - it would be so damn cool and damn near valstile, the pair would go through 400-600 pips in a day. http://www.ifin.ru/publications/read/351.stm here is a link to a good article about the merger of the major banks in one consortium, and everything else follows from it. I think it is clear why the price moves, but WHO moves it, that is the question.
Everything you have described is typical of an equilibrium market, but if suddenly the demand for currency exceeds the supply. That is, several counterparties (banks, funds, traders) will want to buy the currency, the price of the currency will start to rise (the more requests to buy the currency, the higher the price of the currency). The price is not based on the number of deals, but on the number of requests to buy or sell. It is only possible to measure the value of a tick in quantitative terms when the number of buy requests, the amount of such requests and the change in the price in ticks are known over a period of time.
klerk:
Everything you have described is typical of an equilibrium market, but if suddenly the demand for currency exceeds the supply. That is, several counterparties (banks, funds, traders) will want to buy the currency, the price of the currency will start to rise (the more requests to buy the currency, the higher the price of the currency). The price is not based on the number of deals, but on the number of requests to buy or sell. It is only possible to measure the value of a tick in quantitative terms when the number of buy or sell requests over a period of time and the change in the price in ticks are known.
Everything you have described is typical of an equilibrium market, but if suddenly the demand for currency exceeds the supply. That is, several counterparties (banks, funds, traders) will want to buy the currency, the price of the currency will start to rise (the more requests to buy the currency, the higher the price of the currency). The price is not based on the number of deals, but on the number of requests to buy or sell. It is only possible to measure the value of a tick in quantitative terms when the number of buy or sell requests over a period of time and the change in the price in ticks are known.
So I want to determine the mechanism of solving the situation when the demand exceeds the supply.
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So, if I sell a thousand quid at 1 dollar with 1000 requests, the price will start to fall sharply.
Thirdly, I have to conclude that all currency sales come from one source and not looking for a counterparty... Doesn't the price depend on the desires of market participants. Then what is the point of trading signals, determining market "sentiment", fundamental news ...
Caesar:
It was a long time ago when supply and demand controlled the price. One trader said - it would be so damn cool and damn near valstile, the pair would go through 400-600 pips in a day. http://www.ifin.ru/publications/read/351.stm here is a link to a good article about the merger of the major banks in one consortium, and everything else follows from it. I think it is clear why the price moves, but WHO moves it, that is the question.
It was a long time ago when supply and demand controlled the price. One trader said - it would be so damn cool and damn near valstile, the pair would go through 400-600 pips in a day. http://www.ifin.ru/publications/read/351.stm here is a link to a good article about the merger of the major banks in one consortium, and everything else follows from it. I think it is clear why the price moves, but WHO moves it, that is the question.
Yes, I've seen that article. But it is not the answer to the question.
There is no point. if you want to make money, make good (read profit) trades.
A friend of mine, who is a beginner in the market, once said: We are trying to analyse the market, but we need to trade (i.e. make money).
By that time my trading experience was not bad. I 'took my hat off' and shook his hand.
It all depends on the goal...
A friend of mine, who is a beginner in the market, once said: We are trying to analyse the market, but we need to trade (i.e. make money).
By that time my trading experience was not bad. I 'took my hat off' and shook his hand.
It all depends on the goal...
<br / translate="no"> According to you if I sell let's say a thousand quid at $1 with 1000 requests, the price will start to drop drastically.
The whole point of this is that the price movement happens not when you make the trade, but when you're about to make it. If you send 1000 requests for 1 lot ($100000), the price will of course fall or rise sharply (depends on what the request is).
In Forex there is no actual selling of currencies. The condition for Forex trading is that you are obliged to buy or sell the quantity of the currency and also sell or buy the same quantity when you close the deal. Thus, in reality (in the form of real money) on Forex only the differences in exchange rates are circulating.
sergeev:
After all, if someone sells, someone buys his lot, and in reality there is a mutual absorption of two requests, and therefore the difference between supply and demand is equalized.
After all, if someone sells, someone buys his lot, and in reality there is a mutual absorption of two requests, and therefore the difference between supply and demand is equalized.
Realistically in reality... wow :) Mutual absorption of the two demands does not equalise the difference between supply and demand, what makes you think it does?
About the difference between supply and demand, a children's joke comes to mind:
Two men are lost in the desert. Hungry. Suddenly one finds a sack full of gold, the other of rice. Both of them are hungry.
One: "Let's play market, you sell rice and I'll buy.
Second: "Come on, a kilo of rice is half a bag of gold."
One: "What are you doing?! Are you out of your mind to break the price?!"
Second: "Go to the market, maybe you'll find it cheaper..."
CDR:
There is no point. if you want to make money, make good (read profit) trades.
A friend of mine, who is a beginner in the market, once said: We are trying to analyse the market, but we need to trade (i.e. make money).
By that time my trading experience was not bad. I 'took my hat off' and shook his hand.
It all depends on the goal...
There is no point. if you want to make money, make good (read profit) trades.
A friend of mine, who is a beginner in the market, once said: We are trying to analyse the market, but we need to trade (i.e. make money).
By that time my trading experience was not bad. I 'took my hat off' and shook his hand.
It all depends on the goal...
Guys, I asked you not to comment, but just give a normal and straightforward answer (read the link to the answer). And my goal is the same - to find a gold coin in a pile of shit...
so if you hear somewhere that there are trillions of dollars in forex, the real money is 100,000 times less there.
No one will give you the exact answer in numbers, but the essence is told to you.
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So. Sorry for such a perhaps silly question, but I still cannot understand the nature of price movements in the currency market. I.e. how many lots I need to sell, for example, for the price to change by 1 pip for a certain pair. Or this change may be somehow reflected in the imbalance of other parameters.
After all, if someone sells, someone else buys his lot, and the reality is that the two demands are actually mutually absorbed, and hence the difference between supply and demand is equalized.
WHY then there is a price movement, since the number of purchases is always equal to the number of sales (it's not like the broker himself is buying and selling).
Logically , the quotes that are inside the spread are overlapped by the purchases/sales that have already taken place.
And if now someone wants to buy, the broker must find a counterparty. And apparently he will search only through stop orders (because the broker will not work at a loss and buy for me the currency at a higher cost than I want, that is at the limit order). This means that the price I would buy would move down towards my counterparty. Then what price will appear in the terminal - mine, his, or somewhere in between? So my buying moves the price downwards, not upwards. I am confused and confused!
i.e., how many currencies should be bought/sold for a 1 pips movement? You can not comment on it, just give me a link at least...
Very grateful in advance to everyone who responded to the request.
Otherwise I come to the conclusion that you, in fact, professional programmers, write EAs and indicators simply DO NOT UNDERSTAND the laws and causes of market movements (what is actually being written then?)