How Markets Actually Work

Almost every trading superstition comes from not knowing the mechanics. Understand what actually moves price, who is on the other side and why liquidity matters, and most of the myths disappear on their own.

Why this matters more than another indicator

A trader who understands liquidity does not need a theory about why the market "hunted" their stop at 03:00; they know a thin book moves further on less volume. A trader who understands correlation does not open three positions that are really one position at triple size. This is the layer beneath technique.

Put it to use with the instrument guides, the session times and the strategy library.

Frequently asked questions

What actually causes price to move?

An imbalance between buyers and sellers willing to transact at a given price. When resting supply at a level is consumed, price moves to the next level where someone is willing to trade. Indicators and patterns describe what has already happened; they do not cause movement.

Is my broker hunting my stop loss?

Almost never in the way people mean. A retail position is far too small to move a market. What usually happens is ordinary mechanics: clustered stops sit as resting liquidity, price is drawn toward them, and in thin conditions a small amount of volume moves price further than it would otherwise.

What is liquidity and why does it matter?

Liquidity is how much can be traded without moving the price much. In a deep market a large order is absorbed; in a thin one the same order causes a spike that often reverses. It explains why the same strategy behaves differently at 14:00 and at 03:00.

Why does volatility change my position size?

Because risk is stop distance multiplied by position size. If volatility rises and your stop must widen to stay outside the noise, the position has to shrink to keep the money at risk the same. Keeping a fixed lot size through rising volatility silently increases your risk.

Why do correlations between markets break down?

Because correlation describes a past relationship, not a rule. Relationships hold while the same driver dominates both markets and break when something specific hits one of them, which tends to be exactly when a trader is relying on the hedge.