This is a key concept because what drives the currency market in many cases is the anticipation of an economic condition rather than the condition itself. Activities by professional currency managers, generally on behalf of a pool of funds, have also become a factor moving the market. While professional managers may behave independently and view the market from a unique perspective, most, if not all, are at least aware of important technical chart points in each major currency. As the market approaches major 'support' or 'resistance' levels, price-action becomes more technically oriented and the reactions of many managers are often predictable and similar. These market periods may also result in sudden and dramatic price swings.
Traders make decisions on both technical factors and economic fundamentals.
Recently, there has been an explosion of online investment accounts as sophisticated investors realize the advantages of trading over the Internet. Business Week reports that there are three million online investment accounts, up from 1.5 million in 1997. Forrester Research Group estimates there will be 14 million online investment accounts by 2002. The Internet, however, is only a modern medium used to facilitate trading. One is never dependent solely on the Internet for trade execution.