Focus Forex  |  APR 2008

Forex Focus: Making Sense Of Currency Movements by Grace Cheng

Forex Focus: Making Sense Of Currency Movements by Grace Cheng With currency movements so randomized, how could you possibly know when to enter and exit trades? One of the most frequently asked questions among forex traders is certainly this: What on earth is [any currency pair] doing? This question tends to come up especially when you have open positions in the forex market. The nonstop fluctuations of a currency pair’s exchange rate may seem totally random. Some traders will question if it is possible to even trade accurately in such a random market. Making sense of currency price movements is not transgenic science. Once you know the core behavior of currencies, you will find it easier to understand their movements and exploit them for profitable trading opportunities. FUNDAMENTAL BEHAVIOR OF CURRENCY PRICES Currency pairs either move in a trend or within a range. This concept is so simple and yet so revealing that I have to say it again. Currency pairs either move in a trend or within a range. Once you digest this fact, you will come to the realization that currency price behavior can be understood to a large extent and exploited to your advantage.

by Grace Cheng