Market Structure

The overnight session driven by Tokyo, Sydney, Hong Kong and Singapore, typically quieter and range-bound.

When one side is plainly in control: price makes progress one way and pullbacks are shallow.

A pause in which price moves tightly sideways, often after a strong move, while the market absorbs it.

The sharp, immediate move in the seconds after a release or a level breaks — usually the least reliable part of the whole move.

A scheduled release with a strong record of moving markets sharply — for example inflation, employment data or an interest-rate decision.

When price stays at its new level after a move instead of drifting back — the sign that the move was accepted.

A price area the market has clearly reacted to before, and is therefore likely to be watched again.

Liquidity describes how easily you can buy or sell without moving the price. Deep liquidity means tight spreads, reliable fills and orderly movement. Thin liquidity means wider spreads, slippage and sudden jumps. Liquidity varies through the day, peaking when London and New York overlap and thinning during the late Asian session, holidays and the minutes around major releases.

The European trading session, roughly 08:00–16:30 UK time, and the busiest part of the day for most FX pairs.

The current behaviour of the market — trending, ranging, quiet or volatile — that decides which strategies can work.

The pattern of highs and lows that shows whether a market is trending, ranging or turning.

Mean reversion is the tendency for price to move back towards its average after making an unusually large move away from it.

A scheduled release that can move markets noticeably, but rarely resets the day on its own.

The US trading session, roughly 13:00–21:00 UK time, containing most major US data releases.

Whether the market is willing to keep trading at a new price — it accepts the level and holds there, or it rejects it and returns.

A specific price on the chart used as a reference point for decisions.

The upper or lower boundary of a trading range — where price has repeatedly turned back.

Range-bound describes a market in which price moves between a recognisable upper boundary and lower boundary without establishing a sustained directional trend. Buyers tend to appear near the lower part of the range, while sellers tend to appear near the upper part.

A market rotating between a fairly consistent high and low with no sustained direction.

Resistance is a price area where selling pressure has previously been strong enough to stop a rise. When price returns there, sellers often reappear, so the advance stalls or reverses. Like support, resistance is a zone rather than a precise line, and repeated tests attract attention from traders on both sides until the level either holds firmly or gives way.

When price returns to a level it has just broken, to see whether that level now holds from the other side.

Risk sentiment describes the market's overall appetite for risk. In risk-on conditions investors buy growth-sensitive assets such as equities, the Australian dollar and emerging-market currencies. In risk-off conditions they retreat to perceived safety: the US dollar, the Japanese yen, the Swiss franc, gold and government bonds. Sentiment often drives currencies more than the day's scheduled data does.

A period to avoid — usually around a high-impact release or a thin-liquidity handover — where normal behaviour breaks down.

The highest and lowest prices reached during a trading session — the two levels most traders are watching next.

Support is a price area where buying interest has previously been strong enough to stop a fall. As price returns to that area, buyers often step in again, so the market pauses, bounces, or at least slows. Support is a zone rather than an exact line, and the more times it has held, the more traders watch it — until it eventually breaks.

A move that keeps going over time rather than reversing within minutes — the kind a trade can actually be held through.

A chart clear enough to trade from: obvious highs and lows, a level worth watching and a stop loss with somewhere logical to sit.

A period of the day when conditions typically support trading — reasonable liquidity, no major release imminent.

A period where price moves sideways between a fairly consistent high and low rather than trending.

A block of the trading day defined by which financial centres are active, and therefore how much liquidity is available.

A market making a series of higher highs and higher lows, or lower highs and lower lows, in one clear direction.

Volatility describes how much price moves over a given period. High volatility means larger, faster swings and wider ranges; low volatility means quiet, compressed trading. Volatility is not direction — a market can be highly volatile while going nowhere. It rises around major news, session opens and central-bank decisions, and it decides how far stops and targets need to sit.