The main thing driving market prices is expectations. The market's ebb and flow is guided by the pricing and repricing of future expectations. This doesn't mean it's always right, in fact, there are times when it's wrong, and those times offer trading opportunities.
Knowing the underlying expectations is critical for trading success. If you have a good understanding of what's already expected by the market, you can not only spot the changes and make money, but you can also avoid trading what's already priced in and preserve your capital.
By April 9 those were the underlying expectations, but they changed once again when Trump announced the pause for negotiations. From that point onward, the market started to price in de-escalation and price out the negative outcomes.
When you know what's priced in, then you should focus on what new developments could trigger a change in those expectations. That change will drive prices and you will be able to capitalise on it.
This article was written by Giuseppe Dellamotta at www.forexlive.com. Read More Details
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