WHAT IS SUPPLY AND DEMAND? The only reason why a price moves in any, and all markets, is because of the imbalance in supply and demand. The greater the imbalance, the greater the move in price. Why do imbalances occur? • The currency market, the financial world in general is dominated and ruled by big investors, institutions, central banks and professional trades. They have the ability and capacity to move and change the markets with thousands of orders- These orders create the so called supply and demand imbalances. • Daily news occurs and affects the world’s economies • Positive news usually increases demand, and reduces supply, leading to higher prices • Negative news usually decreases demand, and results in an increased supply • The retailer and small investor ends up becoming the bait, the liquidity the professional traders need to fill many of their orders. They can’t sell if there are no buyers interested

File: