Who moves the market
Every price is the last deal between a buyer and a seller. Who the big players are, why they trade, and why macro comes before the chart.
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In this video
- The biggest players are central banks, pension funds, insurers, sovereign funds and large companies. Then come hedge funds, banks, market makers and, at the end of the line, retail traders.
- They trade to grow or protect money, to hedge a risk or to speculate. The big ones decide on growth, inflation, interest rates and the outlook.
- Their orders are too big to fill at once, so over weeks and months prices follow the money that moves on fundamentals.
- The order: direction from macro, confirmation from positioning, timing from the chart.
Next videoMacro FirstReading an economy1:543 numbers tell you how an economy is doing: growth, jobs and inflation. What each one measures, and what it says about the next central bank move.
Key terms
- Central bank
- The institution that sets a country’s key interest rate and controls the money supply, like the Fed, the ECB or the Bank of England.
- Hedge fund
- An investment fund that uses many strategies, including short selling and leverage, to make money in rising and falling markets.
- Retail trader
- A private individual trading their own money, as opposed to banks and funds.
- Fundamental analysis
- Studying the economy, central banks, politics and money flows to judge where a currency should go and why.