Why does the price move? The answer is here!!! - page 12
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and from that comes the conclusion to the basic proof
If you made a sell and the price went down and you closed the sell with a profit, who is going to pay for all this?
the price is to go up, so you don't go out of the market with a profit and wait for someone to buy back from you.
Why are you bringing up hypotheticals, brokers, profits, etc.?
Forget about DTs, brokers, shmokers and so on.
only consider the end point of the transactions - the market makers.
what makes you think that if the bid price went down after the sale, then the offer price went up as well? how do you see profit here?
I don't understand the question
Explain it to me, please.
Someone wants to buy a "hundred million" tanks, he sends a request to the MM, who thinks at what price the tanks should be sold at that moment, and gives him his price. That's it! A tick passed through all the terminals. After this, someone can buy at the offered price, and may change his mind, but the tick has passed. This means that the transaction may not have been made, but the price has changed.
The deals played in this brokerage company do not play any role (pun intended), because in most cases, they do not go out of this brokerage company. Buy or sell, it does not affect anything.
If someone made a sell, the price goes down.
Two times Two? Then explain the technical model, and I take it that's what Gravity meant by getting to the "Truth".
Let me try an example: I am the Hacker. Well, or Cracker, whatever. I need to find out where the server that sends out prices to DCs in different countries is located.
The iron question - which server sends out the "spam" that forms the forex price calculated by supply and demand? Where is the centre? After all, the calculating complex itself (supercomputer, central server, node, whatever) somehow equalizes the price for general access? Do not thousands of banks around the world send information about transactions made by exporters and importers to forex@forex.com? And there it is already processed and sent to DCs and banks? And even if it does? Who owns this hosting?)
How the price is formed - I didn't mean the general principles, that's exactly what is understood, but the micro-model itself. Suppose a second, but what happens in this second in fact, how many signals and which processor processes them and where? Forex is a price that was received from somewhere? Who sent it? (I'm not asking the IP, although it would be great to know :))
So, now I'm already interested - how does the price move?
Thousands of banks are sending reports on their bank's foreign exchange transactions to a centralised server (CA) every second? And the CA already generates a price based on this data?
Really... Come on :) The interplay of 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 that price?!"
Second: "Go to the market, maybe you'll find it cheaper..."
What good is rice in the desert without water?
Thousands of banks send reports to a centralised server (CA) every second about their bank's foreign exchange transactions? And the CA already generates a price based on that data?
No, it is much simpler than that. Banks sell and buy currencies from their clients. To a certain extent, which is set by the bank's internal regulations and perhaps by the restrictions of the national Central Bank, the banks take the risk and grow the position (short or long). As soon as the size of this position exceeds the established limits, then the bank takes measures to mitigate the risk. In the trivial case, the bank buys (or sells) currency from another bank in order to close a normatively risky open currency position. It so happens that large banks have large limits on the open foreign exchange position, hence large banks are caving in big and buying foreign exchange from large banks. There are few centralised systems that bring banks together and make it easier for them to trade currencies. This is where the price is born. The quotes from these systems become the source of quotes for the rest of the world. No one sends any reports anywhere. But if, for example, UBS quietly, outside the system, buys a couple of billion francs from Deutcshe banka, the price of the transaction remains outside the system, unbeknownst to anyone. However, no one can afford to make such a deal.
What good is rice in the desert without water?
The introductory phrase was "starving" and "both hungry". That's the good thing about rice. The rest is all else being equal. But that's not what the anecdote is about, so try to focus on the essentials rather than the details, which are never enough for all cases.
I wonder... how many originals I'll be in this thread ;))))))))))))))
with the answer to the question: Why does the price move? - on the chart !!!