Why Do Prices Go Down on Black Friday?
One of the most asked questions in the Forex community is why do prices go down on Black Friday? It’s a question that many have asked before, and some have gotten good answers to their queries. Others have not gotten so good answers to their questions, and yet, still wish they understood the “why.” Well, if you are one of those people who have never been able to get a good answer to this question from anyone in the Forex community, then maybe it is time for you to change gears and look elsewhere. This article will be showing you why do prices go down on Black Friday.
For the longest time, the Forex market has been one with one consistent price. For a long period of time, no changes could be expected as no trader or broker would ever enter into a trade based on anything other than the price, which was displayed for that day. But after the Internet became popularized, things changed. As people began to trade in the Forex market using their personal computers and online brokers, something strange happened. Something unexpected happened when the volume of traders increased and the competition between them became extremely fierce.
Naturally, competition forced prices down. Now, when people wanted to buy or sell on the Forex market, it was important to know what others were planning to do with their money. In other words, the value of your Forex trade is not going to go up because your neighbor is selling at a very fast pace. What is more, when your neighbor decides to hold his money in the market, you could be sure that your shares will drop in value. However, when you decide to sit on your investment and wait for the market to make moves, then you would certainly be in for a treat.
The advent of Internet trading also changed the way people entered the Forex market. Before, only banks and large financial institutions were involved in the Forex trading game. They made and kept their profits by dealing in huge amounts of currency. However, they were not sharing that information with individual traders who wanted to get in on the action. In other words, they held all the cards when it came to deciding when to buy and when to sell.
Thanks to the Internet, there are now many brokerages that are allowing individual traders the same opportunity. These brokerages are known as market makers. They decide when to buy and when to sell so that the average trader can have better odds of making money than the big guys. The Internet has eliminated the need for traders to have to rely on one another to tell them when to buy or sell. Now, everyone has the ability to check out the current prices online and make their buy and sell decisions themselves.
Why do prices go down on Black Friday? Because the amount of people who want to partake in the Forex market is greater than the amount of people who are able to participate. As a result, the supply exceeds the demand, creating a deficit in the market and causing prices to drop. This deficit is going to cause a great deal of activity on the market on the day of the event itself.