Instant or not?

I have a couple of doubts so i would love to hear any kind of constructive critics.


We know that there are a few reasons that cause the market to move, one of the most important are the so infamous "news" or data release.
Some traders only trade on facts and they just don't pay attention to any kind of technical stuff, so here is is my inquietude.

How do you know that the data that was released 30 seconds or 5 minutes ago is the one causing the market to move lets say 20 pips,50 pips or any amount of pips.

is it possible that for example a simple data release simply starts the fire but the idea of where the market was going, was already predefined by another data that was released before...


if i am not clear enough please let me know i will try to reformulate my question in another way.

thank you,
Dodo

people set limit and stop, and when the market moves, the price trigger it, and moves the market even more, and more.

short timer usually put bigger lot, thus create bigger volatility.

we moves with leverage, example we moves with $10.000 contract size per lot, and take profit for $100 so in this scenario we moves the market $10.000 up&down just to get $100

Hello Gwan,

i don't think that you understand my question...
thank you for your time anyways

Here is a little example of what i mean.

The first data comes out at 10:30 (red line), and after that one the market falls about 300 pips....this 300 or more pips movement took place in that moment because the data at 10 30 "fueled" the market....but as being the one that caused the movement?? this is what i am trying to understand.

thank you

Im not sure I can answer your question but a general rule(which could be BS)is...you can attribute movement to the data release up to about one hour after it has been released...after that, its probably something else "fueling" the market.

Also, last week, when the fed said inflation was still the main concern, the $ gained of course.

Then, when tokyo opened it gained some more, and when london opened, cable dropped 80-100 pips.

Im not sure if that was related to the fed decision, but it appears that it was.

Also, Ive heard that NFP can sometimes influence the direction of a pair for the next MONTH after the release.

As I said, that probably doesnt answer your question...thats all I know about the subject.(and most of that is just what Ive heard so it could be wrong)

Hope that helps,
Nathan

It's very clear, and yes, quite often the latest release is simply "the straw that broke the camels back". Generally when you have big contrary moves, like what's been happening on JPY crosses, you'll have a a building sentiment that the state of the ccy pair is going to change. Often this will show up as a rise in volatility - as traders try and sort things out - or a significant drop in volatility, as they stay out, worried about the possibility of increased risk. It's in the second case (where volatility is unusually low) that I think you are more likely to see the sort of thing you are talking about, as in the first the trade info just gets subsumed into the moment-to-moment trades.

Hello Nathan,

you got an interesting comment right there, and i think that NFP is one of the news that have a longterm impact.

Do you mind giving some more details about this idea?

thank you,
Dodo

Hello halifax,
that moment-to-moment comment made me think about something that might be quite interesting to follow.
Another thing, when volatility settles down, there are still lots of capital in the market, any idea on something that might give us a hint that this is the case?

for example when an important data comes out and the market "doesn't react" well it doesn't instantly but it doesn't mean that there will be no impact. what i am trying to say with this is that is it possible to say that this type of scenario might be represented in a chart with some divergence?

Thank you,
Dodo