The next forex learning material is about what is the driving force of the market?
From the previous meteri, If anything happens next with the forex market is determined by the amount of demand and market supply, then it means that the determinants of the forex market movement is demand and supply on the currency.
So what brings up demand and offers?
Demand arises from an interest to gain, hold or to have something in order to meet the needs or to make a profit. While the Offers arise from the interest to release something because it is not interesting anymore or aim to gain profit.
That way the demand on that currency arises because of the interest of the trader, as well as the bidding on the currency arises due to the interest of the trader.
Interest for what?
Judging from the economic motives, of course the interest of traders to meet the needs or to gain profits.
Interest to meet this need is made by an agency or company conducting international trade for the need of liquidating transactions.
While interest to get more profits made by speculators who want to benefit from the exchange rate difference.
Although different goals, but what is done by both the process is the same, namely by exchanging currency to one another.
This exchange in forex trading practice is known as Buy and Sell.
The real incident of BUY is to remove the counter currency to hold the base currency. In other words BUY activity is because it is interested in the base currency. While SELL is to remove the base currency to hold the counter currency, in other words SELL activity is because it is interested in counter currency.
Do you know Base Currency? it's Lho currency in front of a pair.
"So, if we BUY GBPUSD, what happens is to remove the USD to hold GBP.
If we SELL GBPUSD, yes means we remove the GBP to hold USD "
Therefore, trading is not just a buy or sell GbpUsd, but which currency will we HOLD.
(of course from the results of observing which countries the economy showed improvement.) This will be discussed later ..) "
Back to the topic of market movers,
We know that the Exchange Rate (Price) depicted in the forex chart is the Base currency divided by the Counter currency. So:
When a trader is interested in the base currency, he or she is interested in buying. Finally there was a request on the base currency. This increasing buy interest, according to economic law will make the base currency higher. So the exchange rate of the base currency against the counter currency becomes NAIK.
In other words "Buy pushing the price so Rise"
Similarly, when a trader is interested in counter currency, he is interested in selling. Interest in this counter currency, according to economic law makes the value of counter currency higher, so the value for between base currency with counter currency to be down.
In other words "Sell pressed down the price so"
Of the two things the conclusion is that what causes the exchange rate to rise is Buy Interest, and that causes the price to fall is Sell's interest.
So the real market forex movers that is the INTEREST of traders on a particular currency.
Therefore, in estimating the exchange rate (price) whether to ride or want to go down it should be by measuring the amount of interest of traders as a driver of the forex market.
