I thought the foreign exchange market is a zero-sum game? Now if that is not competitive then I don't know what is.
Well, and with regards to doing everything the same as everybody else, then why are still not more people profitable in the fx market.
But I totally agree that it is much more important to try to understand other market participants (behavioral finance, mass behavior,...), than wasting effort on developing a "trading" psychology.
As someone else mentioned, trading systems and strategies are a dime a dozen and in the majority they're all profitable to some degree. It's not the system or strategy which will make money, it's the trader who trades it, and we've seen plenty of evidence to support that fact. Strategy is probably about the least important aspect of trading but it's something the majority devote all their time, energy, and focus on. The majority lose, what does that tell you?
An impossible task, institutional traders aren't predictable, it's not in their interest to be. If they tell you something there's usually an ulterior motive!
Same goes with people's research of strategies, their attempts are just too amateurish and have nothing to do with proper research.
Well, if it's really the trader who trades it, then I am wondering why more and more investment banks and firms rely on properly researched algorithms instead of individual traders, when it comes to trading. They also wanna cancel out the human component and rely on hard statistics instead.
individual traders aren't predictable, but the mass is to a certain extent. Thus understanding the mass is important
Well there's only so much research one can do on say trendlines and such, over-analysis is just as bad as under-analysis. A simple strategy can be employed extremely effectively, and profitably depending on how it's traded. I suppose my point is it's not necessary to develop some highly convoluted strategy to be profitable, simple does just as well if not better in many cases.
You can probably tell, I'm a big fan of the KISS principle.
Interesting perhaps, but not absolutely necessary I don't think. The trading masses are a notoriously unreliable fickle bunch, I certainly wouldn't like to rely on my speculation about what they may do to form part of my trading strategy!
Totally agree, simple is mostly the best. But I am of the belief that simple only comes after having researched what works and what doesn't. Again, just my belief.
hm, without the masses, price would move nowhere. Or let's say without the large players. In a sense, for example price action is the attempt to make sense of mass buying and mass selling, even though price action is just the result of trading behavior and not necessarily the cause of it.
It might not be necessary to some, but by understanding behavioral patterns, I believe even changing markets are not of a problem, as long as we still can make sense of underlying mass behavior.
Again, just my belief.
