The Forex Human Factor - Anticipating how "The Herd" is Likely to React Can Give You an Advantage
People make up the Forex market and the Forex human factor needs to be addressed. The emotional "soup" of complex, crazy, fearful, greedy, unpredictable minds that comprise Forex also drive its prices.
Understanding that you are one of these millions of minds, rather than holding a "you against the market" perspective is valuable. Supply and demand determine prices, as with any market, and the ability to think ahead will help keep "surprises" to a minimum.
The "herd instinct" or the natural tendency for people to follow others because they believe the others know something they don't, is prominent in the market. While following the trend is generally a good bet, you need to develop a sense of why prices are actually moving to avoid running off the cliff with the rest of the herd.
If the Fundamentals aren't supporting the current trend, use caution to avoid getting caught with the sheep!
