Trace the flow (funds flow) to the core [Koujou Shimizu Water Travel]

In order for the market to move in one direction, there must be a flow of funds heading in that direction, says Noriyuki Mizukami. How does a one-way flow of funds originate in the first place? This time, we will explain the flow of funds that creates FX trend markets.

Noriyuki Mizukami Profile

Noriyuki Mizukami. Representative of Barnya Market Focused. Born in 1978, after graduating from Sophia University with a degree in Economics, he joined Sanwa Bank (now Mitsubishi UFJ Financial Group). After five years in branch operations, he worked as a currency dealer in London, Tokyo, and New York. In the Tokyo Foreign Exchange Market, he is known as “Mizukami of Sanwa.” He served as Foreign Exchange Department Head at Dresdner Bank. From 1996, he served at RBS Bank as Foreign Exchange Department Head, then Foreign Exchange Sales Manager. Since 2007, he has been the representative of Barnya Market Focused. He is renowned for high-precision market forecasts based on years of experience and knowledge.

Trends Are Created by One-Way Flows

Why does the market sometimes move in one direction, and other times oscillate up and down? This is fundamental to the market and very important.

First, when the market moves in one direction, funds are streaming in that direction. When the market rises, there is an upward flow (funds flow). Conversely, when the market falls, there is a downward flow. These upward and downward flows are mainly created by investors, and a one-way market driven by the flow is called a trending market.

On the other hand, if there is no stable, one-way fund flow for either rising or falling, the market will move up and down within a range. Such a market is called a range market. Unlike a trend market, investors are absent and only speculators participate.

Speculators cannot hold positions for long periods like investors do, because they have an inherent weakness. When speculators buy, they must sell to take profits or cut losses, and when they sell, they must buy to take profits or cut losses. In short, the opportunity for speculators to create market flow is extremely limited.