Analysis of psychological behavior in foreign exchange market
"To be a monetary expert, you have to be a self-control person," J.P. Morgan said
After entering the advanced course, you need to know yourself again, and then establish a trading decision system suitable for your own characteristics, and trade according to the system. Strictly follow this advice to ensure that you will not lose more after short-term success!
Analysis of psychological behavior in foreign exchange market
The foreign exchange market is such a market: a large group of people with similar intelligence, facing roughly the same market data, using roughly the same analysis and prediction techniques, following the generally accepted trading rules, play a zero sum game. As a result, a small number of experts started from thousands or tens of thousands of yuan and accumulated tens of millions or even hundreds of millions of yuan of wealth, while a large number of people always made small profits and made big losses until they lost all their money. They still don't know where their failure lies.
For most small investors, they are in a more unfavorable situation: they have limited experience and have to pay a considerable tuition fee for every trap they have never met; With limited capital, they often just entered the foreign exchange market and ran out of ammunition and food; The possession of information is also at a disadvantage. Therefore, the general public often become the victims at the bottom in this charming zero sum game.
The purpose of this article is to tell the public the root cause of their failure. In a sense, the losers in the foreign exchange market are often not unable to defeat this market, but cannot defeat themselves.
- One of the psychological misunderstandings: rush to the place with many people
Blind obedience is a fatal psychological weakness of the public. As soon as an economic data is published, a piece of news suddenly flashes, and the five minute price chart "breaks through", they rush into the market. I'm not afraid that everyone will lose money together. I'm afraid that everyone will make money, but I don't.
I remember during the 1991 Gulf War, when the situation was a little tense before the war, the US dollar rose sharply and the foreign currency fell sharply. On the day of the war on January 17, almost 100% of the investors jumped into the market to sell foreign currency. As a result, the foreign currency rose all the way. After the list was caught, they all waited for the market to turn back with confidence. Naturally, they suffered heavy losses.
War and turmoil are conducive to the strengthening of the US dollar. This is a basic principle. Why did it suddenly fail? The masses often make the same mistakes in the market. Sometimes the prices of orders of different financial companies are almost the same, so that everyone suspects that the market has a pair of eyes on itself.
In fact, the market is fair. With the current daily turnover of nearly one trillion US dollars in the foreign exchange market, it is difficult for any individual to manipulate it. Since September 1992, due to the European currency crisis, speculators in the market have been throwing the pound. The pound has dropped by 5000 points in a short period of time. The Bank of England has repeatedly intervened and even adopted the method of raising interest rates, which is of no help.
In the foreign exchange market, for investors, "don't go where there are many people" is a motto worth remembering.
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作者:cleverboy
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来源:Learn forex trading – Foreign exchange blog
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