Forex

People become primitive and action-oriented when they join crowds.
Crowds feel simple but strong emotions such as terror, elation, alarm, and
joy. Crowds swing from fear to glee, from panic to mirth

A scientist can be cool and rational in his lab but make harebrained trades after being swept
up in the mass hysteria of the market. A group can suck you in, whether you
trade from a crowded brokerage office or from a remote mountaintop.
When you let others influence your trading decisions, you lose your chance
of success.

Group loyalty is essential for the survival of a military unit. Joining a
union can help you keep a job even if your performance is not very good.
But no group can protect you in the market.
The crowd is bigger and stronger than you. No matter how smart you are,
you cannot argue with the crowd. You have only one choice- to join the
crowd or to act independently.
Many traders are puzzled why markets always seem to reverse immediately
after they dump their losing position. This happens because crowd
members are gripped by the same fear-and everybody dumps at the same
time. Once the fit of selling has ended, the market has nowhere to go but up.
Optimism returns to the marketplace, and the crowd feels greedy and goes
on a new buying binge.

Crowds are primitive, and your trading strategies should be simple. You
do not have to be a rocket scientist to design a winning trading method. If the
trade goes against you-cut your losses and run. It never pays to argue with
the crowd-simply use your judgment to decide when to join and when to
leave.
Your human nature prepares you to give up your independence under
stress. When you put on a trade, you feel the desire to imitate others and
overlook objective trading signals. This is why you need to develop and follow
trading systems and money management rules. They represent your
rational individual decisions, made before you enter a trade and become a
crowd member.