› Currency market like an ocean

Currency market like an ocean

“People say to be aware of the sea because waves are gaining strength under the calm surface. People die because of that, they die on rivers and on sea. The same things happen on currency market” - a trader explains market risks. A lot of terms related to liquid are used in this interview, and this comes in line with “market as an ocean” metaphor. “Channels”, “flows” and “streams” are often used to describe the market conditions. The market functioning like an ocean could be compared to liquids in a hydraulic system: “The market tends to find an equilibrium, which represents a real currency value according to the market feeling”, - as a trader said. Fluidity is one of the main features of any hydraulic system effectiveness. “The rates change dramatically on the low liquidity markets. Anyone could get into the market with $10 millions and easily cause a significant price shift. the price action reverses immediately once the liquidity is back to the market”, - another trader noticed. Interview also show that expressions related to an ocean are used not only for the general market description, but also to describe some of the market components. Currencies could “waver”, the market information is “a source”, which “soaks in” and any given country could face “a lack because big Western money are trying to break through to East“.

The currency market nature seems less predictable and determined when it is represented as an ocean, comparing to the “market as a machine”, and remains vulnerable to the environment influence. For example the market as an ocean “remains open to almost any influence which impacts people’s lives in the part related to technologies, politics, economy and geography”, - these are a trader’s words. Such external factors to not have a direct impact for a machine functions. Moreover, as long as a system functioning variations such as “economical cycles” are related to an ocean’s nature, they will be failure signs for machine. Thus, the market as an ocean can be described as calm times and storms. “There are periods when everything is calm and you’ve got normal market conditions when the currency market stands still”, - according to the words of a financial journalist. However, as several other traders and financial journalists examples show, ‘invisible underwater streams” exist like “trade or investments flows”, which can “destroy a dam”. “Money splash just like water when the currency markets waver”. “German Chancellor Helmut Kohl together with Italian Finance Minister Dini had to appear on television just to calm down the flurry when Italian Lira was dipping” - this is an example of such turmoil periods. Then the currencies could calm down, just like the sea after storm

Currency market like an ocean


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