Daily Forex #6 - What Makes The Price Move
Every financial market moves based on supply and demand. If more traders want to buy a certain stock, commodity or currency than there are those willing to sell, then the market moves up in price until those buyers are able to buy. On the other hand, if more traders want to sell a stock, commodity or currency than there are those willing to buy, then the market moves down until the sellers are able to sell.
In the stock market, the price moves based on the company's earnings. If the earnings of a company continue to grow, the probability the stock price will rise is high.
In the Forex Market, the price moves based on traders view of the currency. The main factors that affects the price movement of a currency are Interest Rates, Gross Domestic Product (GDP), International Trade, Politics & Technical Analysis.
Understanding the factors that move currencies is an important first step to becoming a successful forex trader. Technical traders are looking at historical chart patterns and various tools like indicators to determine the future price movements.
Fundamental traders will be analyzing global news and events and reading reliable analyst reports to gain a better understanding of long-term market trends.
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