Psychologically, people behave differently alone and in the crowd. Who better than the Russians, just beginning to crawl out from under the boulders of a totalitarian society, do not understand it. Those of us who grew up under Soviet rule, remember how abused her in the kitchen, but raised his hand at the meetings. And were sincere and in the kitchen and at the meeting, inventing fantastic explanations, trying to reconcile the irreconcilable. A trader sees a trend on the chart, but in the newspaper reads that experts believe the opposite. He begins to thrash about and often believe others’ uncle more than yourself, resulting in a close position with the loss. Glancing at the same plot two weeks later, when the dust cleared, he sees that got lost in the three pines. But when tossed between these pines were so scared that someone else’s uncle was ready to listen.
Markets are arranged so that most traders to lose money. Markets – it pumps that siphon money from the pockets of emotional most of disciplined and informed minority, paying for expensive services of those who served this pump-brokers, accountants, consultants, etc. A good trader – a lone wolf, aloof crowd and paving a path, no matter how strange it may seem to others. Even in everyday life, many successful traders rather eccentric. As the Americans say, they are marching under a drummer.
The crowd – great power. She runs the prices of some shares in orbit and pushes the other into the abyss. Why share in Lukoil stands today on the ruble more than yesterday? The company reserves the same, the same contract, the same staff, and even from authorities such as Nothing new reported. What has changed? Changed score Lukoil crowd. Optimism was more than on the ruble. Emotional waves rolled through markets lead to changes in quotations. Lukoil is going up? Thousand shares me, please. Hundreds and thousands of orders merge into streams that are pushing the trend. Top of optimism and greed, down by pessimism and fear, and almost always more than the reasonable estimates, and all because, when a crowd manage emotions, she bites bits and rushes. Today. Quickly. And drink the brine will be tomorrow. An intelligent trader and analyst sees great paradox. On the one hand, the crowd is always right on the law of force. If the price is 20.5, it is 20.5, and this is not argue, however you may seem that this action is 25. If the next price is 20.25, so the downward trend. On the other hand, the crowd, that’s right, at any given moment, vastly mistaken in major turning areas. On the tops of most of the bulls, and in the grounds – the bears. Our task is to join the crowd when she rushing in one direction, but get off the train before it enters into a steep turn, then crushing the bulls, the bears, but always – indecisive piglets that get underfoot. Identification of trends and reversals – the main task of technical analysis.