The fallibility of human traders - a sentimental theory behind the "unusual" moves in FX

Updated: Dec 20, 2019

Method:


Using the Myfxbook average long versus short price to gauge "normal parameters"


Theory:


The simple fact the majority are often wrong and generally uninformed, and they hold onto losers and cut winners short.


Conclusion:


So, put simply we should always find ourselves within the "Average Short vs Long" price range.


If price exceeds, that small minority of traders are making money - but will they hold?


It's unlikely the majority of that small minority will hold onto winners for too long


Video will explain it graphically.


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