How Financial Markets Work

How Forex/Financial industry works? Real and Practical Definition of Forex Trading. Important Information for Professional Traders 

There are many theories and concepts about forex market. When you will search this topic on internet you will see traditional definitions of forex trading. Here I want to expose most important information which majority of the people does not know. I should not waste your time to describe traditional definitions of forex trading which is also available on internet. According to traditional definition, forex market is a worldwide decentralized over-the counter financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the world and around the clock, with the exception of weekends. The foreign exchange market determines the relative values of different currencies.

Above definition is true only in theories but in practical its mechanic is something entirely different. Procedure is same but control is not the same. There are some international government supported financial institutions who keep control over forex market. Forex trading through worldwide exchanges is not based on fair demand and supply rule. Investors and traders around the world are main victims by these financial institutions. How? Let me clear everything and management will comprehensively guide you to expose this information which normally is not available on internet.

People think, rates which come on a screen through exchanges are based on true demand and supply rule but in forex trading this concept works as opposite. Authentic and fair method of setting a price mechanism for any currency or commodity should be based of true demand and supply rule but here in forex market it’s totally different. Suppose, if around the whole world traders buy EURUSD pair with big volume then according to true supply and demand price should be up because of huge demand worldwide. If price will go up then all traders who created demand for buying a euro should be in profit. In fact monopolist lobbies don’t allow them to take profits, even they suck their money by putting fake virtual investment <only in documents> to sell EURUSD.

Suppose worldwide traders bought 5 trillion euro dollar at any specified time then monopolist lobbies will sell euro dollar more than 5 trillion by fake documented virtual money to make its move to the lower side to decrease its demand, as a result all traders will face loss because all traders are buyers and lobbies put fake money which remains only in documents to cheat and finish the demand of euro which was created by real traders worldwide. Finally they enjoy trader’s loss by creating fake move based on fake money; basically losses of the real traders are the profits of these lobbies.

Very sad point is that these lobbies don’t invest real money while traders around the world invest their real hard earned money. Lobbies place their orders in documents only because they have full control on exchange systems. Whatever the orders size with any quantity they want to put, simply they can place in the market. If the whole world wants to buy euro dollar to make its strong demand then these lobbies can decrease its demand by putting fake documented order in exchanges. It’s all due to exchange system by which forex rates are monitored. Central bank of any country is one of the examples who can effect and control their currency according to their own choice by neglecting true demand and supply rule and nobody can ignore it. Not only central banks but Government supported financial institutions also involve in this tactics of trading. An additional point should be noted that, when lobbies complete their task thn they restore the market at its original level. It is impossible for them to intervene all the time. They enter and exit very smartly and timely.

If we can trade without these exchange systems then no lobby of the world can create fake demand and supply of any particular currency or financial product because of the physical exchange of goods not a virtual. Due to paper currency and exchange system, any level of cheating is possible in financial sector but peoples don’t know these realities. Paper currency and its doubted control is a big question mark for any sensible person who has deep insight vision of financial sector.

Anyways, lets again come to the point, based on previous example some traders around the world will buy euro and some will sell euro, sellers may be greater than the buyers and buyers may be greater than the sellers. According to true demand and supply system price should be raised if buyers are greater than the sellers and price should be declined if sellers are greater than the buyers but things works totally opposite in financial market due to monopolist lobbies. If buyers are greater than the sellers then market will go down and if sellers are greater than the buyers then market price will be up. It’s a reverse of true demand and supply formula, so all traders cannot be looser and all traders cannot be in profit. Those traders will be in profit whose decision will match with the decision of lobbies at different timings. The traders who will with majority (real volume by worldwide traders) will lose their money and traders who will be with minority (financial lobbies) will make money.

Lobbies are actually minority but due to fake virtual money they become majority and even nobody can object them legally. If any trader can understand this concept then he can make real money. But nobody can understand what the lobby is planning to do in the next minute or in next hour or in next day or week or month. The advantage is that if any genius trader can understand this trick and mythology of trading, then he can avoid true competition between buyers and sellers. How lobbies control and how they drive market? All this can be solved & monitored through fixed logic mathematical strategies. management is fully expert to evaluate financial atmosphere between lobbies and real traders. This is a negative face of this situation but there are also some positive effects of this system for traders. All traders around the world cannot be buyers or all cannot be sellers at the same time for any specified financial instrument and on this basis let us know further.

Lobbies act as 100% dishonesty and cannot allow maintaining true demand and supply between real buyers and sellers. But to make money they have to create move in their favor. Some time they make a move in favor of traders to keep their interest alive. They act very smartly to keep balanced approach of trading and when they see iron is hot at melting point then they shape it according to their own interests.

According to reliable statistics daily turnover of forex business is 4-5 trillion Dollars. It means if you come and participate in this business with 10 million dollars, it is very small portion of 4-5 trillion. Your 10 million dollars cannot affect this market even .01%. If you invest more than 50 billion then you may be victim of central banks and lobbies. Investing up to 100 million dollars is quite safe and normal. If your trading system is reliable and is based on true logical reasons according to real facts which I described then this business is very profitable indeed. After understanding these important basis then we need to make proper fixed logic trading plan which should work in any bullish or bearish market.

That’s what how Stocks/FOREX/Commodities markets work, everyone should be well aware of it.