People, Not Price | Forexlive

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One of the reasons why traders find it so difficult to achieve consistent results in their trading is because they do not understand what the true nature of the markets is.

If you believe that a chart, some patterns and indicators, some signals and some price moves are the market, then you may miss the forest for the trees.

Prices, patterns, indicators, signals … all of these are the effect of something and if you are trying to understand markets, you need to understand what is causing those to happen.

In fact, concentrating only on price is something that will not allow one to see things as they really are.

In simple terms, the price movement correlates with the effect of something.

And once traders begin to focus on identifying, understanding, and trading the cause (or causes) of these price moves, their results will inevitably improve.

The way this works is simple: once you understand the causes of price action, you will also be able to identify possible price moves well ahead of others, regardless of whether it is before or when they occur.

Because you understand why the price is moving, you will also be able to accurately estimate when that move is likely to end.

Ultimately, if you look at the impact, you will trade in response to everything that has already happened, while if you look at the causes, you will trade proactively.

Back to basics

Price occurs when two traders try to make a decision to buy and sell, much like a double auction, in which the most dominant force at the time is auctioning it up and down.

Its movement is a function of supply and demand, or, to put it more precisely, a result of a supply / demand imbalance, which in turn means that markets operate from that perspective.

As such, prices will rise when demand exceeds supply and buyers are willing and willing to pay those higher prices.

The price will continue to rise until either there are not enough buyers ready to take that trade or there is an increase in supply that absorbs every demand.

The price drops as supply exceeds demand and as long as there are enough sellers willing to sell their assets at those price points. The price will continue on a downward path until sellers no longer want to sell or there is an added demand to the point at which supply is fully absorbed.

And what feeds the supply / demand imbalance, you might be wondering?

To put it simply: added individual merchant feeling.

It is the pure effect of the feeling of each individual trader that relates to the general market sentiment

Market Sense

A market sentiment is a psychological attitude that captures the mood and attitude of investors, usually toward a specific security or asset. This sentiment can be separated in a bullish or bearish mood in the market. As such, certain business performance or pricing behavior will also affect market sentiment. For example, a bullish sentiment indicates an increase in the price of securities, while a bearish sentiment sees falling prices. Many traders use broader market sentiment or sentiment data to help identify trends that may not seem apparent to many other investors. This can give way to investment sense indices or counter signals surrounding assets, which helps inform investors to make more informed decisions. Using Market Sentiment. Market sentiment is not always based on fundamentals and is therefore viewed as inferior to other methods of trading. This form of investing instead deals with the emotions and feelings of traders. However, many traders, specifically short-term investors, will depend on market sentiment. Sentiment traders put a lot of merit into these trends, just as other investors look for specific signals or fundamental barometers to inform their decision. This is due to the powerful effect of sensation on short-term indicators or attitudes. Many investors also prefer to take opposing views and positions, actively trading against a fixed market consensus. In this case, if the wider market buys a security, an opposing investor would sell instead, and vice versa. This is a popular stock technique. a market that can characterize stocks as either over or undervalued, based largely on market sentiment.

A market sentiment is a psychological attitude that captures the mood and attitude of investors, usually toward a specific security or asset. This sentiment can be separated in a bullish or bearish mood in the market. As such, certain business performance or pricing behavior will also affect market sentiment. For example, a bullish sentiment indicates an increase in the price of securities, while a bearish sentiment sees falling prices. Many traders use broader market sentiment or sentiment data to help identify trends that may not seem apparent to many other investors. This can give way to investment sense indices or counter signals surrounding assets, which helps inform investors to make more informed decisions. Using Market Sentiment. Market sentiment is not always based on fundamentals and is therefore viewed as inferior to other methods of trading. This form of investing instead deals with the emotions and feelings of traders. However, many traders, specifically short-term investors, will depend on market sentiment. Sentiment traders put a lot of merit into these trends, just as other investors look for specific signals or fundamental barometers to inform their decision. This is due to the powerful effect of sensation on short-term indicators or attitudes. Many investors also prefer to take opposing views and positions, actively trading against a fixed market consensus. In this case, if the wider market buys a security, an opposing investor would sell instead, and vice versa. This is a popular stock technique. a market that can characterize stocks as either over or undervalued, based largely on market sentiment.
Read this Term (bullish, bearish or neutral).

This effect is being pushed even further by the sense of urgency in their businesses.

It is important to understand that each trader will have their own motivations, their own methods of analysis, their own timelines, their own individual reasons for behaving as he or she does in the market and in their trading sessions.

Regardless, it will be the collective feeling that matters, because it rules over price.

As we all know, a bullish sentiment will help raise the price, a bearish sentiment will help it fall, and, ultimately, a neutral sentiment will result in a sideways price action.

When wrapped

This is at its core: people making decisions.

As such, the next time you look at a chart, try to look at it not because of its patterns, price moves, and scrapers, but because of what it really is: traders decide whether to engage in a trade by buying or selling, or even sitting this out.

And with that in mind, it will be easier to look at price movements from the perspective of other traders, bears and bulls alike, and how that price movement throws its influence and / or correlates with their decisions, those of fear, greed, bias, and so on. .

You may think that this change of perspective might be trivial, but trust us: give it time and you’ll see how important it is.

And remember, this is actually about people and not about price.

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