It is always interesting and a constant in the forex market (moreso than most as the price action can be so frenetic) that we (all of us) will see market moves via the price action and assume that a market is bid or offered.
A case in point is the current movement around EURUSD 1.3000. One of our faithful contributors (hope he won’t mind me using this example), majimaji, made a comment that there looks to be a seller above 1.3000 to which I retorted that ‘maybe there is a buyer below’.
I don’t have a position – I am square the pair and really have no view – and I don’t know (and it doesn’t matter) whether majimaji does.
It is this very concept that pervades all traders’ views and hence the way they take positions or not, and how they adjudge whether they are right !
BUT it so often a sign of what is inside your head as a trader when you already have a position that can too often persuade you that you are right and sometimes (read that as an understatement) keep you from a more realistic view when the market is strongly telling you that you should think again.
It is very much the case and more aimed at day trading; often you are missing the point and ignoring the momentum against you.
This is not limited to retail traders – it is valid for all, for we all see things differently; the week before I started my three weeks blogging for the team I had a view that was completely opposite from Mike (didn’t know him then !). He commented on a pair being bid, my view was that it was offered….and that’s what makes a market !
