Guest post from visionsofaffluence.com
There are times when following the pack is great. Like if you’re walking down the street and you see all the people ahead of you turning and running in the opposite direction, its probably a good idea for you to do the same. In fact it’s the natural response and part of the reason why we have survived this long as a species however, this natural inclination to follow the lead of others is not always helpful, and in the case of trading it can be detrimental to your success.
You see trading is a field where at any given moment the vast majority of its participants will be wrong. This is because the only way to trade effectively is to buy when prices are too low and to sell when they are too high. In other words if the entire world is screaming buy then you need to sell and vice versa. Just think about it, how often have you been reading posts on your favorite trading forum and seen that the majority of the traders there are convinced that the market is going to move one way and then it does the exact opposite? This is the basis of age old adage buy low and sell high unfortunately most people don’t follow that school of the thought. Instead they buy when prices are high because they think it will move higher and sell when they are low because they think they will move lower. These people are almost always wrong and if you follow them you will be too. So, if you ever want any chance at being successful in this business then you have to develop the ability and courage to do the opposite of what everyone else is doing. You have to let go of the urge to conform and use your own brain and abilities to determine the right course of action. Do that and you will be well on your way to becoming a successful trader.
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