Unfortunately, forex traders of today lack this inside knowledge of how the forex market functions. What a currency trader 'sees' is second-hand news (a streaming rate feed from a broker) and history lessons in the form of rate charts where technical analysis is supposed to give them powers of premonition.
As any seasoned foreign exchange trader who has been in the real market, forex markets (indeed, all markets such as stock markets, commodity markets and bond markets)are moved largely by supply and demand: More buyers than sellers and the rate goes up. More sellers than buyers and the rate goes down.
but what happens in between the sellers and buyers and the rate that you see on your broker's price feed? When I say buyers and sellers, of course, that includes you. but are you aware that your orders in many cases never get beyond the broker? They simply take on your trade, knowing that you will have placed your stop loss orders close enough to your entry price to be stopped out. Or worse still, the broker will 'spike' the price feed. Anyway, that is enough about forex broker tricks!
The real buyers and sellers in the spotforex market are the hedge funds, corporations and sovereign funds. The amounts are massive and selling or buying $1 billion a day is nothing unusually. Add to this the 'prop desks' of the banks, and you will see why forex (4x) is a $2 trillion+ a day market!
The orders are executed through the intermediary of a bank. These banks have access to trading platforms that you aor I (and the forex brokers) don't. Yes, these banks are playing the same game as the brokers, only with enough capital to support this operation. However, they have risk limits, which means they are limited as to how much inventory they hold. So the name of the game is to make a profit whilst staying within limits.
Most Interbank traders (forex market makers) are not concerned with forex charts or forex signals or forex signal services, apart from knowing the pivot points, resistance and support levels, where they can expect some investors to buy or sell. No, they are concerned with the 'flows' and how they can anticipate their customers' requirements.
Getting into the psychology of the Interbank traders, who after all, set the prices for the market, is key if you want to understand the market. After getting experience as an Interbank trader yourself, you will be able to read the 'price action' in the market and anticipate moves accordingly. Ask any ex-Interbank trader - it's true! This is vital information for forex day traders.
TraderMetrics, the forex simulation, allows you to participate in a virtual market model,a daily fx market, where other traders are your 'opponents'. You can, if you wish, take on the 'customers' as they buy and sell into the market place. In any case, it is your wits against the buyers and sellers and most importantly, the other traders.
This is the real secret of the forex market. Master this and you have mastered forex trading.You won't find this information in any forex book or forex training course.
So, take my advice:Register and Download TraderMetrics (the evaluation version is free) and sign up for the virtual market and server software. It is the best way to learn forex trading online.