The biggest question surrounding the Forex trading or any other financial markets is simply this, when I enter the market? Anyone who has traded a demo account or live trading account knows that it is the most important issue. When you "pull the trigger "?
Before we answer that we need to understand what is happening on a day-to-day basis in the Forex market.
Many Forex traders are not aware of the large number of traders in the forex market and the impact of non-effect that traders have on supply and demand. If you are trading a pound / dollar, then you want to take your orders when demand is increasing for a pound or demand for the dollar rises. When is it exactly and how to measure it?
In the forex traders by far the largest group, the commercial their positions can be seen every week on the site under the CFTC Commitment of traders report. Commercial traders do not try to earn money from your currency transactions. They are not interested in the volatility but stability. They are like a big ship going in a direction that takes time and effort to turn. Even more than that, they resist turning. Their objective is price stability, in order to run their businesses, countries and institutions.
To see a solid move traders trading the charts. Perhaps it happened at the beginning of the session and 16:00 New York the dollar gained 100 pips against the pound. Sharp dealers have been looking for this type of store every day. Depending on the type of trading system that would see more of the bars or candles on the scale, they would also see the momentum change.
To sleep at night can turn into a small retracement. In fact, sleep can look back in the consolidation.
The next day, however, the bank has to buy more. Now traders are not holding dollars needed to buy the investment must have learned about investing and to convert its currency in favor of the dollar. This creates more volatility. Now, the big commercial traders have come into action to stabilize their positions. This can cause even greater demand. This continues until the bank in question finishes its job. The size of investment that was initially started to refer directly to a home for more than a trend was created.
This is a simple example of a situation on the market that can cause volatility.
As a trader, to have known? Perhaps a better question is when would you have known?
Top traders learn to follow not only price, but to understand the momentum changes in price. Momentum changes related to the actual "key" trading time on the market can provide the first indication that the market is reading to move. It is the understanding of momentum, which warns top retailers on terms that something is happening in the market.
Many of the very wealthy traders have admitted that they were more lucky than good, but they will tell you that they were ready to take advantage of luck. Momentum of the indicators such as RSI can help preparedness.
Try to learn about RSI, Relative Strength Index to find the momentum for change, especially the abolition of the positive and negative. This will prepare you to participate in this trend when opportunities for market entry.
