Currency Movement Philosophy
Pricewas formed due to the currency transactions in the Interbank market, where one of the market participants to agree or accept the value currency exchange rates offered there. So regardless of the exchange rate offered to market participants in the Interbank Market but when it does happen exchange transactions of currency, then the price will certainly not be changed.
Interbank Market is the currency market closed that only cater to market participants incorporated therein. Market participants who joined the Interbank Market is the Central Bank in the world and the world's major banks. Through Interbank Market that is all the big banks that conduct transactions to exchange currency at his disposal to meet their respective needs.
At the Interbank Market is basically all market participants are each free to exchange quote currency owned or which wanted, because eventually other market participants, who will decide whether the exchange rate offered can be accepted or not.
each bank incorporated in the Interbank market generally offer exchange bid based on current market conditions and internal conditions respectively. Or in other words the decision to issue the exchange offer on the Interbank Market is policy independent of each bank.
Well, the price was seen changing all the time is really due to market participants in the Interbank Market also always change the bid price of its currency under the conditions of trade happened, and when there are market players who accept or agree to the exchange rate offered by the last transaction then of course the price will change.
the price or exchange in which there have been transactions in the Interbank market is in use in general as the benchmark exchange rate money in trade and other business activities outside the Interbank Market. Well, this also includes data exchange shown in broker forex trading online is the price that has been formed in the Interbank Market that.
So the price we are analyzing is actually a currency exchange rate that has been agreed (transaction) by one or some market participants in the Interbank market at that time. Well, the price is the origin of the value of deals banks in the Interbank Market, meaning that the price of a partial picture of the range of value of deals offered to market participants in the Interbank Market. Why only some? Look, it's the price of the agreed value of deals, nah logic value of deals actually it's quite possible the range is wider again, right? ..... Hehehe
Well, if as an analyst we see these prices as the 'value' offering market participants in the Interbank Market agreed other market participants, the first step of analysis we do should be is trying to project a range or ranges of 'value' offering market participants the most likely at this time first before performing the steps of analysis such as setting direction, draw up strategies and other so on.
so how can we project the possibility of a range or ranges of 'value' offering market participants in the Interbank market?
Before we answer this question it helps us try to understand in advance the behavior patterns of market participants in the transaction in the Interbank market. Well, the behavior of market participants in the transaction were actually more likely to follow the conditions of currency trading that occurred at that time. In short if the trading conditions in the Interbank Market traders tend to buy a 'currency' for certain, then almost certainly the bid price offered for the currency will continue to increase (strength) at that time. And vice versa if the terms of trade in the Interbank Market traders tend to sell 'currency' for certain, then almost certainly the bid price offered for the currency will continue to decline (weakening) at that time.
So if the value of deals offered offender market Interbank market continues to increase and there are market participants who trade on the value of the offer then of course the price will continue to rise. Likewise, when the value of the deals on offer continues to decline and there are market participants who trade on the value of the offer is also of course the price will continue to decline. Well, what can we conclude here that turned out to be the value of deals in the Interbank Market was actually directing where prices will move, as long as there are market participants who trade on the value of the offer.
This could definitely explain the logic of the formation of the highest price (Highest Price) and lowest price (lowest price) within a certain time period. Highest Price (Highest Price) within a certain time period established for market participants can not agree or do not want to trade when the bid price offered is higher than the highest price at the time. Well, would not want the value of deals should certainly be under the highest price at that time to market players can accept and perform transactions. When the value of deals are lowered and market participants to accept the transaction is
formed price if we look at data rates (chart) was seen to be below the highest price at the time.
So is the lowest rate (Lowest Price) for a time period established as market participants do not longer willing to offer penawaraan value lower than the lowest price at the time. Well, when this is the case then of course the value of deals offered will certainly be higher than the lowest price at the time. And when the value of deals in the raising and the transaction is formed price if we look at data rates (chart) seen above the lowest prices at the time.
The movement of prices that occurred after the highest price (Highest Price) or the lowest price (Lowest Price) is formed is a movement that describes how to process transactions occur in an atmosphere that is tough, as market participants who want to exchange the currency of its and market participants that offer currency exchange will be mutually strive to transact at the most favorable prices perpetrators of these markets.
at the moment the price is moving continues to rise, this is actually the movement that describes how the transaction occurs in an unbalanced state, as market participants who have a specific currency trading control so that market participants continue to raise the value of its bid. These market participants continue to raise the bid because 'know' that today many market participants who need the currency owned by the company. As long as market participants who need the currency to accept the bid price offered by market players who have the currency, then the price will certainly continue to rise. The upward movement will stop when the market participants who need the currency can no longer accept the bid price offered at the time.
Similarly when prices continue to decline, it actually moves illustrate how the transaction occurs in an unbalanced state as well, as market participants are have certain currencies tend to redeem its currency so that market participants offering value offerings continue to decline so that other market participants continue to be attracted to the transaction. Well, the downward movement will stop when the market participants were offered were not able to offer value deals are lower than the lowest price that was formed at that time.
Now, back to the question above, then how do we project the value range offers market participants in the Interbank the Market? From the above discussion, the highest price and the lowest price that occurred at a specific time period is the only limitation that we can use to describe the value range offers market participants in the Interbank Market. The range of values based on the offers the highest price and the lowest price is the value of deals in the Interbank Market agreed market players, and we know that the range of values the real deals that occurred in the period of time is certainly wider than the range of highs and the lowest prices.
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