Any suggestion when you are able to sell or long the foreign exchange

The biggest question that surrounds trading Currency trading or any other financial market is simply this, When do I enter the foreign exchange? No matter which forex super sonic level you are, you will always ask yourself this situation. Can I long or short now? Is the current market right for me to do that?

To answer this question, we need to analyse the current trend.

Most of us try to force the market to do something when we do not have any influence on the market. All professionals must follow what the market is doing. If it wants to go up, then up shall be our trade. If it goes down, then we will follow it down. When is that precisely and how do you determine it?

First, the biggest group of traders belong to the banks and governments. I always want to know the tendency of these largest group of traders. What are they thinking now? Have they being bullish or bearish? Luckily we have this traders commitment report at CFTC website. These professional traders are only interested in trading long term. They won’t try to put money just for a day or 2 trades. They want to make slow and good money. They don’t care about the minor changes in price.

These group of traders once defined their market direction will slowly and gradually invest their money into the 10k to 1mm market. Possibly 1-5% every week or month till the whole funds in. Once they decide to move, no money can turn them back. Most of the time, they are running resources for their clients or even countries.

Following up are the retail traders who probably trade a smaller fund for profits only. They are trying to make money in the Foreign exchange market for themselves and their clients. There is some debate as to whether this group can create a trend.

It is my opinion that if conditions are right a herding affect can take place where there is a continual demand for one currency or another and therefore a trend but these traders do not have the power to sustain a trend and maintain it on their own. Do you think these two group of oracle-trader traders can help you understand more when to make trades?

Here is a trading situation you can look into. There is a huge institution ready to invest some of their massive capital into the market using US dollars currency. Most of the small traders like us won’t know about this until the funds are already in. Other traders however in the network of Non-commercial traders have their contacts and the word gets out in particular when the demand for Dollars grows.

More Non-commercial traders jump on board and demand for the Dollar increases even more.