i'm confused on the mass psychology....for example, Fibonacci retracements are commonly said to be self-fulfilling because so many people trade based on them. but that doesn't make sense for me.
for example, if at the 1st retracement it says that people should go short, and everyone shorts, wouldn't that mean that supply falls dramatically, and thus price should rise instead of falling?
same with common candlestick reversal patterns....like if there's a hammer at after a downtrend it should reverse....but if everyone goes long, wouldn't it be overbought, and thus continuing going down?
what am i missing?
thanks.
for example, if at the 1st retracement it says that people should go short, and everyone shorts, wouldn't that mean that supply falls dramatically, and thus price should rise instead of falling?
same with common candlestick reversal patterns....like if there's a hammer at after a downtrend it should reverse....but if everyone goes long, wouldn't it be overbought, and thus continuing going down?
what am i missing?
thanks.