Predicting Forex Market Behavior?
Posted in Psychology by Lewis Wolfe
Tuesday, January 20th, 2009 9:16 AM GMT
The forex market? Predictable? – well, just at the moment, while we are hardly in normal trading conditions, that doesn’t necessary mean predictability is reduced…
For light reading, I have been checking James Surowiecki, The Wisdom of Crowds. The critical factor in this treatment of the subject is the consideration of a collection of individuals, all making independent decisions (given the same apparent input data) – yes, a bunch of forex traders, each of whom know it’s them against the rest – rather than the standard psychology of crowds.
Its main objective, to demonstrate that these groups of individuals may well make ‘better’ decisions is perhaps not really what concerns us, being uninterested in the correctness, or otherwise, of the mass decision, and much more interested in our position versus the mass, the market, the future…
Another area of the discussion, that seems particularly relevant to forex markets, is the extent to which our opinions may be determined by those of around them – and that is psychology, pure and simple.
Look around the web, there’s interesting reading-matter to be found – not necessarily on the financial or investment sites – that might just inform your psychology when looking at why a market, or here, a forex pair is behaving the way it is…
James Surowiecki, The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations. More info here.
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[...] Original post by ForexPerform [...]
[...] The forex market? Predictable? – well, just at the moment, while we are hardly in normal trading conditions, that doesn’t necessary mean predictability is reduced… For light reading, I have been checking James Surowiecki, The Wisdom of Crowds. [...]