Why does the market fluctuate for seemingly no reason? | Forex Factory

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Why does the market fluctuate for seemingly no reason?

  • #1
  • First Post: Jun 22, 2021 8:20am Jun 22, 2021 8:20am
Does anyone have answers for why price fluctuates so massively for no reason?
Any input would be appreciated
I'm more advanced than a beginner but less advanced than an expert.
You miss 100% of the shots you don't take
  • #2
  • Jun 22, 2021 10:04am Jun 22, 2021 10:04am
Quoting roccor
Does anyone have answers for why price fluctuates so massively for no reason? Any input would be appreciated I'm more advanced than a beginner but less advanced than an expert.
Nothing happens for No reason, there has to be a willing seller / willing buyer, otherwise there is no transaction at that price.

Of course unscrupulous broker activity excluded.

Don't know your level of knowledge, how you define advanced / expert. Mostly Rookie information.

Some reading / research is necessary on your part:

Supply & Demand
Economic News Events
World Geo- Political Events
Central Bank Interventions
Government announcements
Natural Disasters
World Health Disasters
Terrorism
etc.
It never gets easier, you just get better
  • #3
  • Jun 22, 2021 10:29am Jun 22, 2021 10:29am
Everything has a reason. It's just that it looks a bit random, especially when you look at shorter timeframes. Search up random walk theory, and how it relates with efficient market hypothesis. This basically tells us the more random and unpredictable the market is, the more efficient it is, while the opposite is true as well (the less random and more predictable the market is, the less efficient it is).
  • #4
  • Jun 22, 2021 11:17am Jun 22, 2021 11:17am
Quoting roccor
Does anyone have answers for why price fluctuates so massively for no reason? Any input would be appreciated I'm more advanced than a beginner but less advanced than an expert.
I used to wonder that Roccor, but stopped concerning myself some time ago because it depends on so many factors. Remember, it's the large banks that move currencies in the main, plus central banks with a little bit of hedge funds, and they all have their own agender which can vary hugely.
It's my belief that currencies are basically a "Random Walk with occasional Levy Flight" and after years of doing this and lots of research it's the conclusion I've come to.

But at the end of the day it really doesn't matter, just trade it with your strategy............
  • #5
  • Jun 22, 2021 6:51pm Jun 22, 2021 6:51pm
Market fluctuates because buying and selling interests are taking turn alternately at support and resistance levels. The fluctuations can then be categorized as impulse and corrective waves to identify the ongoing trend …
Market is not random but unpredictable
  • #6
  • Jun 23, 2021 3:10am Jun 23, 2021 3:10am
Quoting Shabs19
{quote} Nothing happens for No reason, there has to be a willing seller / willing buyer, otherwise there is no transaction at that price. Of course unscrupulous broker activity excluded. Don't know your level of knowledge, how you define advanced / expert. Mostly Rookie information. Some reading / research is necessary on your part: Supply & Demand Economic News Events World Geo- Political Events Central Bank Interventions Government announcements Natural Disasters World Health Disasters Terrorism etc.
Thanks Shabs
A prime example happened today, EUR/GBP fell to the lowest point since April. now I thought this may be due to German PMIs but the PMIs were better then forecast so why would the EUR go down instead of rise? I don't know if I'm missing information or what.
You miss 100% of the shots you don't take
  • #7
  • Jun 23, 2021 3:11am Jun 23, 2021 3:11am
Quoting rover99x
{quote} I used to wonder that Roccor, but stopped concerning myself some time ago because it depends on so many factors. Remember, it's the large banks that move currencies in the main, plus central banks with a little bit of hedge funds, and they all have their own agender which can vary hugely. It's my belief that currencies are basically a "Random Walk with occasional Levy Flight" and after years of doing this and lots of research it's the conclusion I've come to. But at the end of the day it really doesn't matter, just trade it with your strategy............
so basically trade how you want to trade and ignore the temporary bumps?
You miss 100% of the shots you don't take
  • #8
  • Jun 23, 2021 3:45am Jun 23, 2021 3:45am
Quoting roccor
{quote} Thanks Shabs A prime example happened today, EUR/GBP fell to the lowest point since April. now I thought this may be due to German PMIs but the PMIs were better then forecast so why would the EUR go down instead of rise? I don't know if I'm missing information or what.
It's not as simple as that. I wish it were that simple.

You have to look at the context of where EUR is in relation to GBP

Very often the Higher timeframes tells you which currency is predominantly stronger, especially against the other major currencies.
GBP has been stronger, and very often these News Events are already priced in to where this currency should be at.

You should also look at the technicals, EURGBP making new lows in the last 4 weeks, long term picture declining market. Sell the rallies.
It never gets easier, you just get better
  • #9
  • Jun 23, 2021 3:49am Jun 23, 2021 3:49am
Quoting Shabs19
{quote} It's not as simple as that. I wish it were that simple. You have to look at the context of where EUR is in relation to GBP Very often the Higher timeframes tells you which currency is predominantly stronger, especially against the other major currencies. GBP has been stronger, and very often these News Events are already priced in to where this currency should be at. You should also look at the technicals, EURGBP making new lows in the last 4 weeks, long term picture declining market. Sell the rallies.
very, very helpful Shabman
when you say 'already priced in at where the currency should be at' what do you mean by that?
You miss 100% of the shots you don't take
  • #10
  • Edited 4:41am Jun 23, 2021 4:24am | Edited 4:41am
Quoting roccor
{quote} very, very helpful Shabman when you say 'already priced in at where the currency should be at' what do you mean by that?
EURGBP selling off at critical levels where there was previous sell offs, when price comes back to these levels, there is a good chance more sell off will occur.

Don't trade this pair but I can see 0.8602, 0.8590 - 0.8587, 0.8574 - 0.8567 being prominent levels.
Price tried to clear orders here, shown buy impulse candles ( large range candles) to fill Sell orders , whilst taking out stop orders of people going Long.

I mainly look at technicals and try not to trade during major News Events, only after.
It never gets easier, you just get better
  • #11
  • Jun 23, 2021 4:53am Jun 23, 2021 4:53am
Quoting Shabs19
{quote} EURGBP selling off at critical levels where there was previous sell offs, when price comes back to these levels, there is a good chance more sell off will occur. Don't trade this pair but I can see 0.8602, 0.8590 - 0.8587, 0.8574 - 0.8567 being prominent levels. Price tried to clear orders here, shown buy impulse candles ( large range candles) to fill Sell orders , whilst taking out stop orders of people going Long. I mainly look at technicals and try not to trade during major News Events, only after.
thank you very much for your help buddy I appreciate a more experienced trader like yourself (i assume you are) helping out those less experienced, takes patience so thank you for taking the time
You miss 100% of the shots you don't take
  • #12
  • Jun 23, 2021 5:04am Jun 23, 2021 5:04am
Quoting roccor
{quote} thank you very much for your help buddy I appreciate a more experienced trader like yourself (i assume you are) helping out those less experienced, takes patience so thank you for taking the time
HTH
It never gets easier, you just get better
  • #13
  • Jun 23, 2021 5:07am Jun 23, 2021 5:07am
what we need is some nice "stories" as why this happens
life is a reflection of what we allow ourselves to see
  • #14
  • Jun 23, 2021 8:27am Jun 23, 2021 8:27am
Quoting mikeeating
what we need is some nice "stories" as why this happens
This is what I mean by already "priced in ", these reports are seen a lot earlier by the professionals.


Fill your boots:
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It never gets easier, you just get better
  • #15
  • Jun 23, 2021 9:59am Jun 23, 2021 9:59am
Quoting Shabs19
{quote} This is what I mean by already "priced in ", these reports are seen a lot earlier by the professionals. Fill your boots: {image}{image}
you're helping me so much man let me take you out to dinner to say thank you
pizza or pasta?
You miss 100% of the shots you don't take
  • #16
  • Last Post: Jun 23, 2021 2:02pm Jun 23, 2021 2:02pm
I really liked the answer that Emar gave in the thread, in my opinion, I believe that the markets in the long term do follow a reasoning regarding the macroeconomy. In the short term? I think there is a lot of noise. Don't get me wrong, I'm an intraday trader, but it seems that in the short term the price is pushed to certain levels to create a totally different market sentiment, and that's when they turn it around!
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