What's behind the price change?

Can anybody comment on the mechanics of a price change.
What makes the price go up or down by 1, 2, or 5 pips at a tick?
Who determines this change? A committee? One bank? which bank?
How much of a trade does it take to make the price change 1 pip or 2 or 5 in a big and low volume market?

I'd appreciate any comments from anyone.

Little green men, central banks, politicians, mega brokers (market makers) and traders all move price..

but the driving factor is $MONEY$ $MONEY$ $MONEY$ $MONEY$ pumped in and out of markets.


3 trillion USD is traded in Forex every day. It takes many billions of USD to move this market.

Here's an example:

I've seen it when the BOJ intervened. The price went up around 75 pips in a very short time. But i'm talking more about what happened when the price went up. How did it actually go up? The BOJ orders, let's say, a buy of USD/JPY at 118.00 for 6 billion USD. Do all the sell orders get filled by the buy order all the way up until the 6 billion USD is exhausted? And this might be at 118.75? And if there is a sell order for the same amount at 118.02, does the price stay at 118.02? And the bank that filled the order, does it determine the last price of the pair? Thank you for your reply.

Prices move based on the volume of supply and demand. If someone demands more of a currency at a given exchange rate than is available, the price will move either up or down a pip until the demand is satisfied (depending on what currency of the pair in question is in greater demand). For example: Let's say I want to buy a yard (1 billion) of Euros, the market only has 35 million available at the current price, so I soak all that up and then the value goes up a pip because I have made Euros more valuable due to scarcity, so then let's say the next price has 55 million available to me and I soak that up, and it continues until the market has satisfied my demand. You then can of course take profit in filling my demand by offering me your euros that you happen to have by selling them to me for a better price (to you) than you bought them for.

However, you have to remember that there is more than one network of banks trading currencies around, so there is always the opportunity for arbitrage between markets as well.

I'm tired so you'll have to excuse the somewhat brief answer, I'll try and elaborate on it later.

Jedi

Thank you for your reply. That's the info I was looking for. I have a few more questions but i will save them till after you elaborate more on your reply.

Buying and Selling... Scalpers entering and taking small profits... LoL