Price Momentum

There are two essential moves in forex market:


Impulsive Moves
An impulsive moves always run in the same direction as the primary trend. An impulsive move is characterized by a strong/fast move in one direction, thus producing some of the larger candles. It is also usually followed by several candles moving in one direction, or the bulk of them in a move. The candles are often signified by closes towards the top or bottom of the candle, depending upon the direction of the impulsive move.


Corrective Moves
Corrective moves are the most common moves to follow an impulsive move, also known as retracement;  temporary price reversals that take place within a larger trend. They are practically the inverse of impulsive moves. The candles are usually smaller in nature with closes not particularly aligned to the top or bottom. They are usually a mixed with both bullish and bearish candles and generally have little or no bias.

Market Trend

There are only three ways the market can go;

• Up
• Down
• Sideways

Uptrend is price movement of a financial asset when the overall direction is upward. A formal uptrend is when each successive peak and trough is higher than the ones found earlier in the trend. For example, the peak at Point C is higher than the peak at Point A. Uptrend continue when price making new high at point E. The uptrend will be deemed broken if the next low on the chart falls below Point D.

A formal downtrend occurs when each successive peak and trough is lower than the ones found earlier in the trend. For example, the low at Point C is lower than the low at Point A. Downtrend continue when price making new low at point E. The downtrend will be deemed broken once the price closes above the high at Point D.

Sideway trend is horizontal price movement that occurs when the forces of supply and demand are nearly equal. A sideways trend is often regarded as a period of consolidation before the price continues in the direction of the previous move.

Supply and Demand

Have you ever wondered why the price is always moving? The simple answer is because of the imbalance between supply and demand. Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Price is a reflection of supply and demand.

• Prices will rise when demand exceeds supply. 
• Prices will drop when supply exceeds demand. 
• Prices will stop/ranging when the supply equal to demand. (this zone also known as cluster)

Just remember:

• Supply = Resistance 
• Demand = Support

Welcome forex trader

I hope all the information in here can be benefited to all forex traders.

Price action is simple, but not easy to learn and take a lot of screen time and pratice. If you have zero knowledge about forex please go to school here. You may come back here when ready.

There is no holy grail in forex, proper mindset and money management is still rule number 1 to survive in this arena.