2 biggies

[foed]

Hello traders,
i would like to ask you if you have explanation for this situation in market:

What is happening on market? I can' find any psychologic behnd this or psychological explanation or .. whatsoever explanation.
What happened and why it happened? Nothing was in makrocalendar at this moment.
It is M15 gold.

It is happening from time to time everywhere and I am trying to find WHAT THE HELL IS THIS SITUATION
Thank you and sorry for my english.
Have a nice day.

 

[tomorton]

Thie timing matches the release of the US FOMC September minutes, but exactly why price rose then fell then continued to fall I don't know, I don't follow Gold. If you trade Gold you must either have an opinion about this, or if not need to stay out of the market when key announcements like that are on the calendar, e.g. I try to be not in USD positions across Non-Farm Payrolls.

 

[foed]

Thank you for your post. Primary I meant generaly what is going on the market when this situations, suddenly occurs - normal chart going down, up, or choppy and suddenly big UP and then big DOWN candle appears.

Could it be that big player just bough for longtime and then retail trader were selling because price was "too high" ? Im trying to find out what is behind these situations.

 

[tomorton]

Sudden moves are normally driven by events. This can be fundamental - release of economic data, geo-political events, interest rate decisions etc., or internally generated by the market - options expiry, flash crash etc. Thery are not normally purely TA-driven as TA is being continuously re-evaluated in real time and there should be no sudden surpises here.

Events generate different views of their implications. Good news for the Chinese economy could be immediately good for the currency of a major supplier like AUD or bad for a competitor like USD but possibly bad long-term for AUD and good for USD. What it means for EUR and CHF is even more open to argument and these arguments result in opposing positions, which cause price movement. It is essential that different traders have different views on the value of an instrument - if they did not, there would be no trading.

So events can generate a lot of noise. These two candles could have been reversed or much larger or might have extended for another hour or might have occurred just over a minute or less. The exact sequence, strength, pattern and duration is pretty unpredictable.

On a longer time frame, gold made a hammer candlestick, suggesting buyers had won the argument over the day, and indeed, price is rising strongly today.

All this action and theory is interesting but not relevant without a strategy to profit from price movements in the market. Whatever strategy is used in such situations should agree with the trader's general style (strengths, market access, capabilities, capital, risk tolerance etc.).