Forex

In the old days, markets were small and many traders knew one another. The
New York Stock Exchange was formed in 1792 as a club of two dozen brokers.
On sunny days they used to trade under a cottonwood tree and on rainy
days in Fraunces Tavern. The first thing brokers did after they organized the
New York Stock Exchange was to stick the public with fixed commissions
that lasted for the next 180 years.
Today, only floor traders meet face-to-face. Most of us are linked to the
market electronically. Members of the financial crowd watch the same
quotes on their terminals, read the same articles in the financial media, and
get similar sales pitches from brokers. These links unite us as members of
the market crowd even if we are thousands of miles away from the
exchange.
Thanks to modem telecommunications, the world is becoming smaller
and the markets are growing. The euphoria of London flows to New York,
and the gloom of Tokyo infects Hong Kong.
When you analyze the market, you are analyzing crowd behavior. Crowds
behave alike in different cultures on all continents. Social psychologists have
uncovered several laws that govern crowd behavior. A trader needs to understand
how market crowds influence his mind.