What Causes Forex Price Movements

How Does Price Move and Where Does It Go?

The first thing a trader needs to know and understand in the fx market is the way in which prices move. Knowing this will determine what you do when trading currencies. You have to be able to understand what’s going on in the market in order to make smart decisions. You should be able to look at the price charts of the assets you are trading and know what is happening with them. Prices move in two directions. That is simple up and down… rarely sideways, but sometimes.

Price can move up, which means it is rallying or a bull market or it can move down which means it’s consolidating or a bear market. Price can also move sideways. This is often referred to as the price being stuck or on a plateau. You usually do not want to be trading a when the price is doing this. Based on the prices moving up down or sideways, will determine how you will make the trade.

If you fail to understand these principles, you will lose all of your money. In an effort to make it up, you will lose more money. This is why it is so important for you to know this information.

One of things you should do is to practice reading online forex charts you need to be familiar with basic charts so that your eyes are accustomed to them and your mind can quickly digest the information. Remember when you started to drive and you had to stop and think about everything you were going to do and you had to worry about people and cars and traffic and parking… Eventually it became familiar and your mind was able to grasp the situations quickly and you did not have to think about it much anymore so it was no longer occupying your mind, this allows you to see farther and evaluate other actions. This is true with charts and graphs after a while you mind will grasp the data quickly and you will begin to notice patterns and movements.

Get a whole bunch of different price charts and drill whether or not the price is going up, going down or moving sideways. This should be one of the first things you need to learn how to do. In summary, the prices in the Forex market move up, down or sideways. Make sure that you know exactly what is happening or you will lose all of your money. The best thing to do is to practice reading the charts. If you do this, youwill be well on your way to being a great success at trading the foreign exchange market.

To be successful you need to be well educated and well equipped and familiar… familiarity will make you comfortable and you will see soon you will start to trust your judgment.

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