EVERYBODY IS LOOKING AT THE SAME CHARTS...

My Trading Station

One interesting fact about trading that most newbies tend to neglect is the reality that thousands (if not millions) of traders all over the world are basically looking at the same price charts that we are looking at too.

Well, eventhough you may ask - so what?, the fact is, this is the number one reason why price movements are so-much driven by the psychology of human beings.

The basic mechanism is basically a self-fulfilling prophecy in which you act accordingly to what you believe. It is getting into the collective consensus on what the majority of market players believe that remain as a challenge.

Berbatov from Bulgaria may buy 10 lots, Robert from US may sell 50 lots and Ah Chong from Singapore may wait to either buy or sell 100 lots until the signal is super clear to him.

The question is : Are we trying to outsmart each other here? I believe the answer is yes. In fact this is what trading is all about. You are buying with the hope that the price will move further up and you sell in the hope for the price to move further down.

Either way, you are subjective to your own opinion. If the majorities (especially the tycoons and institutional traders) are not in consensus with you, then you are surely in trouble. Getting it wrong once in a while is indeed ok and pretty normal. But getting it wrong 9 out of 10 times would probably tell you that there is something wrong with your market analysis and decision making.

Perhaps you play the market the way you want it to be, or you tend to move against the market 90% of the time. In that case, you have no choice but to re-check what you believe and analyse whether it is worth to stick to your current system (if you have a system) or otherwise.

Lately my trading skill is getting better each day especially with balance approach between both technical and fundamental aspects of the market. Everytime I am in front of my trading station, I try my best to time my entry base on hourly and 15m intervals, apart from emphatizing what the market is doing from the price actions it self.

It seems that everytime I told myself that I could get this wrong, it tends to be otherwise. What I am saying here is that though I may feel 100% confident that the market will move the way I see it, I still keep myself down to earth by telling that I could be wrong. Using this humble approach improves my risk management calculation apart from being realistic with my trading expectations.

Only one thing, news time are still the most dangerous, though profitable period that one should give additional attention. It can be traded for sure, but not using the set and forget system as volatility during news hours are too unpredictable. So the best way to trade the news is simply get in and get out at the right time, or perhaps just don't trade the news at all.

So, the fact that everybody is looking at the same charts give you the ideas that the move is surely motivated on what the market participants are doing. It doesn't move on its own. Somewhere somehow somebody at the other end of the world could probably be buying or selling the pairs that you are looking at that triggers that slightest (ie 1 pip) or avalanche of pip movements.

;)