Why does price retrace?

[ivanlim]

May i know why doesn't a price move in one direction all the way,instead of retracements occuring? Shouldn't the price continue to rise if everybody buys a currency pair? Sorry if i do not make sense as i'm still unclear about many things about forex and i need some help. Thanks for understanding

[spike]

You should tune into my weekly podcast, the Secrets of Successful Traders. Many of the traders we interview each week are former floor traders and they speak firsthand about the supply and demand levels that drive the markets and how to spot these levels on the charts.

Right Click the link below and Save AS to download podcast!

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http://media.libsyn.com/media/rkassulker/sosTraders_003.mp3

[goldtop]

How about actually contributing something remotely worthwhile yourself to one of these topics, instead of answering every single post on the forum with yet another of your tiresome & blatent spam exercises.

[ivanlim]

Thanks

[Edward Revy]

Hi ivanlim,

For every buyer in the market there is a seller. Trends form when one of the sides gets stronger and confidently presses on. But with time everyone needs a break: to take profits, to adjust risks, to get our with a loss (for some), to reverse a position etc - majority of these operations take place at market support/resistance levels - so called "pit-stops" for every trend. So, as the interest temporarily eases on one side, the opposite forces take over causing the market to retrace or completely reverse.
Retracements are expected and wanted by many traders, since it is the most cost & risk efficient way to enter the market, which is already trending.

[ivanlim]

Alright. Thanks for your help Edward