Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 4 - Technical Analysis
Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 5 - Psychology
Skillsfirst Level 5 Diploma in Financial Trading (RQF) - Module 6 - Risk and Money Management
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MINDSET

There is an innate tendency among market participants to purchase at higher, not lower prices. Conversely, when the market is going down, there is the tendency to sell at lower prices, rather than buy. After all, who wants to stand in the way of sellers and load up?

This is not to suggest that the only way to successfully trade is to either go against the market or to go with it. There are tough times when it makes sense to go against the crowd, times when there are extremes.

The fact that buyers tend to buy higher and sellers sell lower is a result of crowd psychology and the desire to follow the leader rather than to lead. In general, workable trading strategies that take advantage of this observation can be profitable regardless of whether you trade with or against the crowd. Typically, a trader does one or the other, but like any athlete who has truly developed their game, being able to use all the tools available to you presents you with significant advantage to those that cannot.

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