Many novices do not do major reason money management and risk management of the principles of operation of the market without understanding. Simply do not know what to say in the end. So it should be easy to explain the currency in the end is how it works. Foreign exchange market is the world's largest financial market. Principle of operation of the market with the principles of operation of other financial markets are basically the same. In the market bullish, is not optimistic about the two sides do business in a certain range.
According to a recent example of actual trading. For example, before the euro zone 1.3300-1.3480 hovering doing business. The main reason for the activities of currency options with a large formation of these wandering regions have a close relationship. That 1.3250-1.3300 and 1.3480-1.3530 euro zone has a large area sits options to protect those areas.Technical analysis of the people in this region called support and resistance areas, experts will say the sale of the hands of large option sits areas. Whatever we have to respect the existence of the market. That is, in the vicinity of 1.3300 euro to buy, sell near 1.3480 euro should be in line with one of the trading market operation.
Because that's what the market do, we do with them. The problem is that these options have the timing or hovering area and will not for a long time in there. At the same time unpredictable factor would come in at any time of messages, at any time will destroy the existing wandering area, balance area. Changes is eternal, the balance is temporary. One of the euro zone lingered, 1.3300 to break through, and under normal circumstances, when a lot of options will occur in the market, spot trading in the big move. Usually do business in the area, when hovering, spot trading has its own hand, stop, stop turning point.
Generally do not leave the area of extreme hovering 50 points. and so. 1.3300 to break, these promising positions Euro spot should stop or stop rotation. For professionals 1.3300-1.3250 area should have a rotation stopper. As a result, the balance of power could have become one-sided force. Tendency to form one-sided, unilateral city. Great changes have taken place in the options market. In order to hedge the option near the 1.3300 bullish euro, those banks to sell a lot of cash euro to hedge their options to ensure that will not lose money.
It is generally break after wandering Pacific market is very fast, completely one-sided market. It is for this reason.Those wandering area after breakthrough, the minimum length of unilateral market square would win their hands full distribution warehouse, with each other to find a balance of power so far. Target minimum amplitude trend running about with almost hovering area. That is the minimum target 1.3100. Long-term, medium-term, short-term steps are the same. Of course, to 1.3100, then look at how the operation of the market situation.
Those wandering area destroyed city after unilateral action, called the trend. Wandering in the market area was destroyed after trading with the trend is another market operation accord. Because the market is supposed to work, and we keep. That is, in principle foreign exchange trading in line with market operation only two. First, after the break with the trend hovering zone, second zone at both ends of wandering trading. This is the simple principle of the foreign exchange market is in the end how it works. Why have lingered area, why there is a tendency of principle. Of course, this does not guarantee that we'll continue to break through in the direction of a breakthrough after wandering area. However, the opportunity to break through in the direction of the big. So we were going to break through in the direction wagered large surface. The market is always a chance things are not so big problem.
