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.