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 linked to the real currency market. There's no online exchange rate maker. Exchange rates are determined exclusively on real exchanges, and Forex is simply a reflection of the current situation.

That is, if an event occurs in real life that causes the dollar to plummet, and a large portion of the population tries to exchange it for euros, then the online Forex exchange rate for that currency will also plummet.

Can supply and demand be used in real trading?

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

During the threat of default in the United States and a sharp increase in the supply of the American currency, I managed to earn more than $ 7,000. First, by selling, and then by rising the rate.

The main thing is to correctly structure the trading process itself.

• It makes sense to conduct such trading only 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 a few days.

• The increase in demand or supply must be real, and not just speculative, for example, an increase in dollar sales 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 should only 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.

Forex trading, taking into account supply and demand, is a type of news trading , using news and data from real interbank exchanges as sources of information.