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Wednesday 30 March 2011

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.

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