Supply and demand in Forex.

Concepts such as supply and demand are the basis for price formation in any market; it is the number of people willing to sell and buy that sets the price level on any of the exchanges, and it does not matter at all what is sold there - currency, gold or cotton.

Supply and demand also play a decisive role, despite the fact that the market itself is virtual, it is subject to generally accepted laws and principles.

It is the timely assessment of these two factors that will allow you to create the most profitable Forex strategies.

Let's start with the fact that the Forex market is closely related to the real foreign exchange market, there is no online rate formation, the exchange rate is formed exclusively on real exchanges, and Forex is simply a reflection of the existing situation.

That is, if in real life an event occurred after which the dollar began to sharply depreciate, and the majority of the population tries to exchange it for the euro, then on online Forex the quotes of this currency will sharply go down.

Can supply and demand be used in real trading?

Yes, of course, in fact this is trading based on fundamental factors, in which the latest news and analytical data can be used as an entry signal.

During the period of threat of default in the United States and a sharp increase in the supply of American currency, I managed to earn more than $7,000.

First on sale, and then on the growth of the exchange rate. The main thing is to correctly construct the trading process itself.

• It only makes sense to conduct such trading on the EUR/USD pair, since these two currencies are alternative sources of investment.

• The event that changed the situation must be strong enough to cause a Forex trend that will last at least several days.

• The increase in demand or supply must be real, and not just speculative, for example, an increase in sales of the dollar by the Central Bank, with a simultaneous increase in the supply of the euro and a fall in its value.

It is clear that in this situation, EUR/USD only needs to be sold. • Buying makes sense only at the beginning of an uptrend, selling at the beginning of a downtrend; the longer the current situation lasts, the higher the likelihood of a trend reversal.

Trading taking into account supply and demand in Forex is one of the types of news trading , the sources of information are news and data from real interbank exchanges.