Most traders think markets move because of news, indicators, or "big players hitting buy." Reality is simpler — and far more structured.
Every price movement has three forces behind it:
- 1
Liquidity (The Fuel)
Price moves where liquidity is thin. Not because buyers are stronger, but because sellers are absent — or vice versa. Most "breakouts" are simply liquidity pockets being hit, not real momentum.
- 2
Positioning (The Pressure)
When too many traders are on one side, the market finds the opposite direction. Why? Because tight positioning creates forced exits — stop-loss triggers → cascading moves.
- 3
Volatility Regimes (The Mood)
Markets behave differently under different "regimes": Calm regime → trends work. Choppy regime → mean reversion works. Panic regime → volatility explosions. Most traders lose because they use the wrong strategy in the wrong regime.
The Takeaway
Price is not random. It's a living system responding to liquidity, positioning, and volatility — not your indicators. Understand the system → understand the market.
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