You probably have read this over and over again - in Forex, you must do what the crowd isn't doing, swim against the current, and so on - insert your cliche here. You know what... As a Forex trader, I say - that's a load of garbage. If you read something like this, you can be sure, that the writer is outsourced, and doesn't even know a thing or two about Forex currency trading, or financial markets in general.
So, read on for my take on the truth here.
First, I understand where that myth comes from. Let me use stocks as an example. A company stock becomes so popular, that everybody and their grandmother is buying it, and you see advice on some popular magazine that you should buy this stock immediately - be sure you do not follow this advice. Because, every stock that is so popular, is most likely overbought, and a drop in price will most likely follow.
However, if you are even semi-serious about trading - and I hope you are, otherwise, get out, now - you should know already that "everyone and their grandmother" is not a crowd to even consider. More, it is different in currency exchange - everyone is so smart in stocks, or commodities, but you don't see them bragging about a recent long buy or short sell of USD/JPY.
Instead, you must follow the crowd. Just one tiny thing - determine, where that crowd is going to go (not so difficult with a simple price analysis, you don't even need fancy indicators or robots for that) and be cozy and warm inside that big crowd, swarming in the direction you need, and protecting your position.
That's right - it is a lot safer to be inside the crowd. Let their orders and stop losses protect your position, don't be the first in line.
Just determine, where the crowd is going to go, where everybody is going and tag along. That is one sure way to profits.
So, read on for my take on the truth here.
First, I understand where that myth comes from. Let me use stocks as an example. A company stock becomes so popular, that everybody and their grandmother is buying it, and you see advice on some popular magazine that you should buy this stock immediately - be sure you do not follow this advice. Because, every stock that is so popular, is most likely overbought, and a drop in price will most likely follow.
However, if you are even semi-serious about trading - and I hope you are, otherwise, get out, now - you should know already that "everyone and their grandmother" is not a crowd to even consider. More, it is different in currency exchange - everyone is so smart in stocks, or commodities, but you don't see them bragging about a recent long buy or short sell of USD/JPY.
Instead, you must follow the crowd. Just one tiny thing - determine, where that crowd is going to go (not so difficult with a simple price analysis, you don't even need fancy indicators or robots for that) and be cozy and warm inside that big crowd, swarming in the direction you need, and protecting your position.
That's right - it is a lot safer to be inside the crowd. Let their orders and stop losses protect your position, don't be the first in line.
Just determine, where the crowd is going to go, where everybody is going and tag along. That is one sure way to profits.
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