Market Movers: Forces Behind Trading

Created by Admin in Lessons 22 Nov 2024

Market Movers

The highest motivation of the owners of capital to be in the financial market world is profit and becoming wealthy. George Soros, Goldman Sachs, JP Morgan and its allies are the players behind the movement of prices in the market. We call them the Market Movers (MM). The MM has a significant capital which is enough to move the market, even supposedly he could shake the economic stability of a country when he wants to.

MM buy a particular currency when they argue that the currency is at low prices. As we know, when demand increases, the price will move up. They do so simultaneously until the price reaches the upper limit and the market begins to saturate. So when the price arrives in this area, the MM will take action selling off as part of an effort to profit-taking. Typically, the MM will piggyback on the emergence of an important economic news (example: FOMC, Rate announcement, the GDP index etc.) to move the market.

When MM is in the action phase of the purchase, the price will move up to be smooth and gradual. Starting from a sharp movement up and then slowly began to appear weak. This is known as "out of steam." This condition indicates that the MM is getting fed up with buying. So consequently, the price starts to move sideways up and down on a specific price level area. And again, an important economic release will be the momentum for the MM to improve their position (whether they open a new buy position, remove long positions and start selling, or not doing anything).

When news is released, the market will move fast, chaotic, with prices going up and down quickly. MM action "shake out." Often, retail traders will be trapped by the situation and begin to open positions without careful calculation. Small traders are afraid to miss the train. Panic in the crowd is what MM needs. Retail traders panic, open without calculation, and end with a Stop Loss. The keyword for the first success for a retail trader is "do not panic and never open a trade without calculations!"

Psychology and Professional Traders

No sophisticated financial analysis can generate predictions of price movements in the market with 100% accuracy. Even smart computing devices will never be able to provide that high accuracy. This is because the market is greatly driven by psychological motives.

Professional traders often say that the most appropriate animal profile to describe themselves as pro traders is crocodiles. Crocodiles can survive in this world for millions of years. Crocodiles do not spend energy to chase in vain. They save energy, which is just enough and not less, to catch prey. Be patient, they wait for their prey.

Of course, the crocodile often fails in its hunting. Prey may dodge and escape. But the crocodile never panics. It returns to the waiting position and prepares for the next opportunity. One weapon to face the uncertainty in the market is discipline. When the market moves in uncertainty, then the pro trader will protect their accounts with high self-discipline. They create trade rules for themselves in accordance with the strategies they use, and with high self-discipline, they always follow the rules of the trade.

The market is a world that is free to a high extent. But every trader should create trade rules for themselves and should be responsible for those trading rules. This is the factor that distinguishes a pro trader from a trader who fails.

Discipline spawns consistency, and consistency leads to responsibility. By doing so, a pro trader will open every transaction without hesitation and without fear. They do not hesitate because they believe in the trading strategies they use. They are not afraid because they have taken into account all the consequences of a transaction. When the market moves against them, they are always ready for it, remain calm, and respect the will of the market.