How to Use Behavioral Analysis For Trading Forex and Other Markets
In the currency market, like all other commodities markets, wealth is neither created nor destroyed. It is only transferred among the market’s participants. In other words, it’s a zero sum game. This means that winners take money at the expense of the losers. Over time, the winners are usually the minority while the losers are the majority. The reason why losers can make up a large portion of traders is because of behavioral biases to act with the crowd and also because some “losers” are actually hedgers that take losses intentionally to support outside business interests, as opposed to speculators.