Forex

ment turns wild. Prices move in small increments during quiet times.
When a crowd becomes either spooked or elated, prices begin to jump.
Imagine bidding for a life preserver aboard a sinking ship- that's how
prices leap when masses of traders become emotional about a trend. An
astute trader tries to enter the market during quiet times and take profits
during wild times.
Technical analysts study swings of mass psychology in the financial markets.
Each trading session is a battle between bulls, who make money when
prices rise, and bears, who profit when prices fall. The goal of technical analysts
is to discover the balance of power between bulls and bears and bet on
the winning group. If bulls are much stronger, you should buy and hold. If
bears are much stronger, you should sell and sell short. If both camps are
about equal in strength, a wise trader stands aside. He lets bullies fight with
each other and puts on a trade only when he is reasonably sure who is likely
to win.
Prices, volume, and open interest reflect crowd behavior. So do the indicators
that are based on them. This makes technical analysis similar to poll-taking.
Both combine science and art: They are scientific to the extent that we
use statistical methods and computers; they are artistic to the extent that we
use personal judgment to interpret our findings.