When Buyer and Seller agree on both Price and Value, no trade will ever be made.
Buyer and Seller have to disagree on Value, not on Price, in order to make trades. Because there are many buyers and sellers in the world of currencies, there are alway people who value a currency different and so price keeps moving around. If one can predict value, one can predict price.
Fundamental analysis is all about predicting value, while technical analysis is all about predicting price. We can see price moving in the charts and so try to predict where it might be going, but forces we cannot see make the price go up or down. If we could only see those forces…
When observing the way market, volume and price change, we can see similar mechanics in the physics of pressure. Hang on for a few seconds, it’s quite simple.
Pressure and Forex: if i shake a bottle of champaign forcefully, the cork will pop out and champaign will be wasted. So if pressure rises in one places, stuff will go from where the pressure is high to where the pressure is low.
The same proces works for Forex price: if value differs, price will move. And again: by knowing where the pressure is, we can tell where …
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