The regularities of the Forex market
Forex regularities are situations, which periodically repeat on the currency market: currency changes and its stereotypical behavior in similar circumstances. Studying these regularities you will be able to forecast the course of events, make right decisions and get profit even while performing routine operations.
Major trends in Forex
To understand the Forex trends we recommend to pay attention to the regularities concerning the following factors.
- Price channels. The channel formation occurred if the price repeated several times the minimum and maximum indicators during a certain period of time. It means that the price movement has become regular, so it is possible to determine which of the entry points into the market will be the most profitable.
- Closing of gaps. Often after holidays and weekends at the currency exchange market you can see the appearance of gaps in the quotes. The reason for its appearance is the difference between the closing price and the opening price of the trading session. Such a gap is normal, and it is closed, as a rule, within a day.
- Movement and pullback. After the sharp changes of the rate or news release it is possible to observe the reverse movement – rollback. The tendency is that the more noticeable and longer is the jump, the more significant is the pullback or correction. It is possible to make a profit both on the movement of the rate and on its correction.
- Supply and Demand. This pattern applies to the entire economic industry in the same way. A change in the exchange rate is associated with an increase in supply or demand. Thus, the higher the demand – the higher the price, but the more supply – the lower the price.
- Expectation of news. News can influence the exchange rate even before its release. Information with forecasts of indices or important events will move the rate in the direction of the forecasted direction. The rate will change only if the forecasts are not confirmed after the news release.
- Correlations. The reaction of currencies to gold, oil and grains may be logical. In order to find the connection it is necessary to use charts of Forex and look at changes of prices and quotes of commodities of different groups. It is also important to determine whether the quote in front of you is forward or backward in order to make the right decisions.
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