Forex market is driven by motives and energy of "greed".
The highest motivation of the owners of capital to be in the Forex world is profit and becoming wealthy. George Soros, Goldman Sachs, JP Morgan and its allies are the players behind the movement of prices in the Forex market. We call them the Market Movers (MM). The MM has a significant capital which is enough to move the Forex market, even supposedly he could shake the economic stability of a country when he wants to.
MM buy a particular currency when they argue that the currency is at low prices. As we know, when demand increases, the price will move up. They do so simultaneously until the price reaches the upper limit and the market begins to saturate. So when the price arrives in this area, the MM will take action selling off as part of an effort to profit-taking. Typically, the MM will piggyback on the emergence of an important economic news (example: FOMC, Rate announcement, the GDP index etc.) to move the market.
When MM is the action phase of the purchase, the price will move up to be smooth and gradual. Starting from a sharp movement up and then slowly began to appear weak. This is known as "out of steam". This condition indicates that the MM getting fed up of buying. So consequently the price starts to move sideways up and down on a level area specific price. And again, an important economic release will be the momentum for the MM to improve their position (whether they open a new buy position, remove long positions and start selling, or not doing anything).
When news is released, the market will move fast, chaotic, prices go up and down quickly intervening intervening. MM action "shake out". Often, retail traders will be trapped by the situation and began to open the merchandise without careful calculation. Small traders are afraid to miss the train. Panic in the crowd is what MM need. Retail traders panic, open without calculation and end with a Stop Loss. The keyword for the first success for a retail trader is "do not panic and never open a trade without calculations "!
Psychology and professional traders
No sophisticated financial analysis can generate predictions of price movements in the Forex market with 100% accuracy. Even smart computing devices will never be able to provide that high accuracy. This is because the Forex market is greatly driven by psychological motives .
Professional traders often say that the most appropriate animal profile to describe myself a pro trader is a crocodiles. Crocodiles can survive in this world for millions of years. Crocodiles do not spend energy to chase in vain. He saved energy which is just enough and not less to catch prey. Be patient, he is waiting for its prey.
Of course, the crocodile often fails in his hunting. Prey may be dodged and escape. But the crocodile never panics. He returns to the waiting position and prepares for the next opportunity. One weapon to face the uncertainty in the Forex market is the discipline. When the Forex market moves in uncertainty, then the pro trader will protect his/her accounts with a high self-discipline. They create trade rules for themselves in accordance with the strategies they use, and with high self discipline, they always follow the rules of the trade.
Forex is the world that is free to a high extent. But every trader should create trade rules for himself and should be responsible for the trading rules. This is the factor that distinguishes a pro trader from a trader who failed.
Discipline spawned consistency and consistency leads to responsibility. By doing so, a pro trader will open every transaction without hesitation and without a fear. He does not hesitate because he believes in trading strategies that he uses. He is not afraid because he has taken into account all the consequences of a transaction. When the market moves against him, he is always ready to it, remains calm and respects the will of the market.