WEBVTT 00:09.500 --> 00:15.530 If you have had the chance to take my first course, we have talked a lot about the participants in the 00:15.530 --> 00:17.160 Forex market. 00:17.210 --> 00:22.750 This time we are going to analyze the participants in the Forex market from a different point of view. 00:23.180 --> 00:27.010 From the perspective of supply and demand. 00:27.020 --> 00:32.490 When you buy a currency pair, you are basically increasing the demand for that couple. 00:32.570 --> 00:38.210 While when you sell a currency pair, you are increasing the supply for that couple. 00:38.240 --> 00:46.240 So we can say that buyers and sellers are responsible for the level of supply and demand. In Forex market, 00:46.250 --> 00:50.240 we can find buyers and sellers like me and you. 00:50.240 --> 00:52.600 What are we doing on the market? 00:52.670 --> 00:57.500 We speculate the market. We don't really care about fundamentals. 00:57.500 --> 01:04.200 We maybe read the economic calendar to stay away from trading when important news are released. 01:04.280 --> 01:09.830 Maybe we try to make profit trading the news but we don't do more than that. 01:09.860 --> 01:15.060 We try to make a profit from speculating the market imbalance. 01:15.410 --> 01:22.100 What if euro-dollar pair collapses in a couple of weeks from 1.15 to 01:22.100 --> 01:23.000 0.95? 01:23.060 --> 01:25.820 Is it going to affect us? 01:25.940 --> 01:27.180 Not at all. 01:27.320 --> 01:34.200 Even if we had a long position we probably had a stop loss of 100 pips or less. 01:34.250 --> 01:41.420 So we don't really care if the price went down by two thousand pips in a couple of weeks. So we can summarize 01:41.480 --> 01:49.340 our action on the market saying that we try to make profits on the market analyzing lower timeframes 01:49.700 --> 01:57.050 investing an amount that can go from a few hundred dollars to hundreds of thousand dollars. 01:57.110 --> 02:01.080 What kind of impact do we have on the markets? 02:01.090 --> 02:10.700 Zero! Forex has about 4.1 trillion dollars transactions every day on average. A position of 02:10.810 --> 02:12.090 $10000 02:12.110 --> 02:15.620 is not going to affect the market. 02:15.650 --> 02:22.320 Another category of buyers and sellers are the ones that participate in the interbank market. 02:22.550 --> 02:30.200 The interbank market is the market through which large banks transact with each other for both their customers 02:30.290 --> 02:32.090 and themselves. 02:32.090 --> 02:39.500 Among the largest players are Citicorp and JP Morgan Chase in the United States, Deutsche Bank in Germany 02:39.830 --> 02:42.250 and HSBC in Asia. 02:42.560 --> 02:48.700 The minimum size for a position in the interbank market is five million dollars. 02:48.830 --> 02:56.440 But most transactions are much larger and some can top one billion dollars in a single position. 02:56.570 --> 03:03.320 If you think of a transaction of one billion dollars in a market that has an average of four point one 03:03.320 --> 03:09.720 trillion dollar transactions each day on average, probably it's still not much. 03:10.010 --> 03:17.840 But if you think that 10 or 20 of these transactions are in the same direction, it starts to be relevant 03:17.870 --> 03:20.420 in terms of supply and demand. 03:20.900 --> 03:28.970 So throughout this course, I will talk a lot about buyers and sellers or bulls and bears if you want to 03:28.970 --> 03:34.800 use Forex jargon and I want you to understand that I'm not talking about me and you. 03:34.880 --> 03:40.600 We don't have any power on the market so there's no point to study our action. 03:40.670 --> 03:47.040 When I talk about buyers and sellers I mean the large participants in the Forex market. 03:47.330 --> 03:54.400 So the ones that can have a huge impact and can change the balance between supply and demand. 03:54.440 --> 03:56.930 They are the ones who move the market. 03:56.990 --> 04:00.110 So it makes sense to study their behavior, 04:00.320 --> 04:07.510 how price moves as a result of their actions and formulate concepts to try to be in the same boat with 04:07.510 --> 04:08.290 them.