6 reasons to shift from “Why” to “What” and “How”.
In Forex trading, many new traders ask questions like, “Why did this currency pair move up?” or “Why did the market react this way?” While understanding the market's mechanics can be helpful, experienced traders often say that asking “why” is not as useful as asking “what” and “how.” Here’s a look at why focusing on the “why” might not only distract but also detract from developing effective trading strategies.
1. Market Moves Aren’t Always Logical
The Forex market is driven by a myriad of factors: economic data, geopolitical events, central bank policies, and even global sentiment. Often, these forces don't align in ways that make immediate logical sense. For example, good economic data from a country may not always lead to an increase in the value of its currency. Traders who spend too much time trying to dissect every market movement may become frustrated when they realize there is no straightforward answer to “why.”
This leads us to the key insight: in Forex trading, knowing “why” something happened is less valuable than knowing “how” to respond. Professional traders often focus more on market reactions and patterns than on trying to explain each fluctuation.