How can you earn on the stock exchange? Only when the price of the selected tool will move in the direction you need. The stronger and further the price moves, the greater the potential of earnings / loss is. Price is driven by buyers and sellers. Those, who behave stronger and more aggressive – push the price. Price increases as long as
there are customers and begins to fall, when the number and the strength of customers decreases.
Do the news, fundamental data, support and resistance levels, crossing various sliding, etc. affect the price? No, they don’t. If there are a little purchases, the price falls. If there are a little sales – the price is rising. That’s the whole logic.
All these factors may affect the traders, and they, by their own actions, affect the price. It turns out, that in order to predict the price movement, you need to predict the actions of market participants. The price is derived from their activities. And most of the different indicators are derived from price.
The price is moved by major purchases or sales. It’s not a secret. Small speculator or investor will not be able to move the price. A bucket of water will not increase the sea. But a major player always moves the price, entering in a large way. He knows this, and is ready for this.
And our task is very simple – to understand what is happening on the market. Is there a battle between the small speculators or activity of a major player? When we observe him – we need to go in the same direction he has chosen. Then, the probability to earn will be much higher.