Who Moves Forex - the Big Players

Everyone Trader who is a reasonable thinker, is used to the idea that all of his trading order volumes are small in order for him to be able to swing the currency market, to have a significant impact on changes in currency rates. As a rule, for many traders this is actually the case, but some financial institutions reject this statement.

The most obvious example of market influence is the work of Central Banks. Additional investment rates (refinancing), intervention by other states in domestic affairs (intervention) and other instruments that are created specifically to To regulate quotesThe question arises as to how the deviations presented in the technical picture are often caused by this. This raises the question. Do the banks directly participate in the trading?

They accept. But their trading volumes of orders are so huge that it is simply not practical to use them all at once in order to enter not with the full amount of money. Orders are opened gradually from one point. On this condition if a very large player enters the marketThe currency jumped by several dozens of points at a time. And after the pullback from this point occurs, another order is opened, which also provokes a jump. These situations are called testing support levels and resistances. But it is worth noting that the testing may not only be due to this factor, when new trading platforms emerge, which are characterized by large orders.

Trade with the big players on the

But can such turns of events bring useful information to a trader? First of all, remember that big players a much more knowledgeable about the market than ordinary participants. This promises a pretty solid outlook for the bidder.

Further, the intervention of U.S. banks at the moment of their sole presence in the market has the direction of pushing the exchange rate to its mass accumulation (stop-loss). This leads to a reversal of course movements. These events are very profitable for the financiers, who are profiting from them. Hence the question arises: should we take our profits or wait for the big players to take what they came for and leave the market? Or maybe wait for the whole picture to become clear, subsequently joining these currency players, gaining their own profits?

Is it possible to establish the point at which major playerswho have an influence on the formation of the price, will decide to make a profit? And how to act in such situation to the simple trader? It is actually possible to establish - on such sharp jumps of the rate, but, unfortunately, among such general noise with the price, it is very difficult to notice at once. Yes, in addition, similar figures can cause such noise. But, if you could or suspect the entrance to the market of such major playerIt is best to hedge your positions or leave the market altogether, especially at a time when the technical picture predicts a trend change in speed.

Defend against the big players on the

A lot of analysts who are aware of such phenomena strongly recommend to protect their positions: to place pending orders either above or below the point of entry of a large player or players into the market. If we speak in technical terms, then it is the so called Breakdown of support and resistance points. If the points are broken, the order must trigger, which will bring the trader to profit on the trend wave, and if it does not break the points, the order will not be triggered.