Welcome to Interbank Currency Trading
The Beats and Rhythms of Forex
Author Thomas Oberlechner in his book entitled, The Pyschology of the Foreign Exchange Market, showed results of his research on professional forex traders and how they look at the markets. One perspective Oberlechner used are varying metaphors. The primary metaphors imagined by forex traders are a bazaar, gambling, a machine, a robot, a war, a sports competition, and an ocean. These pictures weren't identified by accident. They are just important ways for people to organize a jumbled data and correlate them with their expectations with the market.
The major point behind Oberlechner's research is that the thought process to grasp the forex market is a factor in-itself in ways to doing their trade. The individual who looks at forex as a competition will go for winning trades as the primary goal, but is also facing emotional damages when he/she loses. Alternatively, an individual who sees forex as an ocean adopts long term perspectives of market behavior.
Many traders look at trading as a war, consequently, formulating trading strategies that tries to capture pip moves like they were enemies.
Forex traders also relate their life experiences with the market. Engineers, for example, models the market like a project that can be defined by equations; while doctors see trading like they have to be diagnosed. Martial artists approach it with discipline and with an art to stabilize their emotions while at it. The best approach, it turns out, is nothing and everything. Forex trading equalizes all fields and succeeding at it depends entirely on the conditioning of the individual.
But there's one exception. The field of music can provide many insights to forex. As music is all about harmonies, beats and rhythms; the forex markets are all about surges, plunges and other fluctuations.
Many individual traders have preferential time interval. It may be daily or an hourly chart. They use that chart and bring on various analysis techniques to condition a trade. While there's a reasonable substance on this in the evaluation of a market, there's another technique to consider. It's letting the time interval choose the trader. To illustrate, when driving your car and looking for a good radio station, you roll the frequencies and listen to each station for a moment, looking for the right tune. You don't know what music would come up in the next station, but once in a while you reach a perfect harmony. In the same way, forex is continually running various patterns and from this comes many possible trades. Traders that have related music with the forex scan prices, until the spot the right pattern for a good trade.
