Why the market tends to fall faster than it rises ? | Page 2 | Forex Factory

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Why the market tends to fall faster than it rises ?

  • #21
  • Jan 9, 2010 11:36pm Jan 9, 2010 11:36pm
Quoting Ronald Raygun
You're right Rabid, but in the context of rise and fall, Forex has no 'up' or 'down'
Sure, no absolute up or down, but since so many pairs are USD-based, you end with xxxUSD. Any USD strength pulls price down, and USD strength is correlated (right now at least) to market weakness.

So when the market drops, USD-based pairs tend to drop too. Since the general market drops fast, those USD-based pairs are going to be forced down fast too. To put it in a general form, USD strength has been moving faster (lately) than USD weakness. In that way, pairs like the USDCHF actually move up faster than they move down. Or at least they did last year.

Keep in mind that the general market hasn't always been this way. It used to be the other way around.
  • #22
  • Jan 10, 2010 7:52pm Jan 10, 2010 7:52pm
So it is more about stock market. But in stock market is involed money as forex, ok stocks don't trade money, but if you trade wrong you lose money like in forex or in any other market.
I don't undestand the psychological factor
  • #23
  • Jan 10, 2010 10:26pm Jan 10, 2010 10:26pm
Quoting lolpie
Gravity?

Its easier for something to fall than to rise...
lol .. first thing came to my mind
  • #24
  • Jan 11, 2010 4:20am Jan 11, 2010 4:20am
Quoting AQs
So it is more about stock market. But in stock market is involed money as forex, ok stocks don't trade money, but if you trade wrong you lose money like in forex or in any other market.
I don't undestand the psychological factor
For allot of people it is hard to see the clear picture if a trade goes against them.

Most of the time fear or greed will be a factor that has to be dealt with.
That's why it's easier to set an entry and exit point..
  • #25
  • Jan 12, 2010 2:15am Jan 12, 2010 2:15am
Quoting Chunnel
For allot of people it is hard to see the clear picture if a trade goes against them.

Most of the time fear or greed will be a factor that has to be dealt with.
That's why it's easier to set an entry and exit point..
This is also true in forex, when your trade go in the opposite direction, you're losing money and the fear and greed is the same (or this is what I see as noob perspective )
  • #26
  • Last Post: Jan 12, 2010 2:39pm Jan 12, 2010 2:39pm
Quoting AQs
In this page
http://www.babypips.com/school/ascending_triangles.html
I founded this statement, I'd like to know why.
As my point of view there is no reason that market should falls faster then it rises...







(I don't know if I can post an external link, I don't find anything about it in the forum rules)
In that example, the resistance line is FLAT but the support line is SLOPPED.

The steeper the support or resistance line, the more fragile the support or resistance.

Stock prices tend to fall more violently than the rise but stocks have an upward bias, Forex does not.
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