fbpx

Stop Looking for Answers- The Market Doesn’t Have to be Rational

In the 1970s, a Harvard psychologist conducted an experiment. She went to a library and approached a photocopier where a line was being formed. She walked up to the first person in line and said: “Excuse me, I have five pages. May I use the machine?” Her success rate was 60 percent. She then repeated the experiment, this time by saying, “Excuse me, I have five pages. May I use the machine because I’m in a rush?”. In this case, her success rate was 94 percent. One could say this is understandable as people were sympathetic to someone in a rush. She then tried one more experiment, this time saying, “Excuse me, I have 5 pages. May I go before you because I have to make some copies?”. The result was still an astounding 93 percent success rate! Even though all people in line were there for the same reason (making copies), she was able to justify her behavior with the simple word of “because”. It doesn’t matter if the excuse is good or not.

If the market rises or falls by 30 pips, you will never find the true cause from so called market experts. The simple reason for a movement of this size is purely white noise, the combination of an infinite number of market movements. Unfortunately, most people won’t accept this and look for real palpable reason and the “experts” are happy to provide one. Whatever reason they provide will be meaningless- fears of a trade war, speculation of a fed rate hike etc.

Market movements don’t need to be justified. Sometimes prices move “just because…”.

No Comments

LEAVE A COMMENT

Your email address will not be published. Required fields are marked *

Recent post

君诺金融有限公司版权所有

君诺金融在瓦努阿图共和国注册成立,并受瓦努阿图金融服务委员会(VFSC)许可及监管(第40099号)。

君诺金融不接受来自个别国家和地区的客户。 有关受限国家的完整列表,请联系客户服务。

风险警告

我们的服务包括以保证金进行交易的产品,并对您的资金承担高度风险。 您可能会承受超出您的初始投资的损失。 您应该确保您完全理解所涉及的风险,并在必要时寻求独立的意见。 请阅读我们的完整风险披露声明。

君诺金融旨在为全球交易商提供最好的外汇,差价合约和金属交易环境。君诺金融为介绍经纪人,资金经理和白标签提供了许多合作机会,我们独特的合作伙伴计划通过深入的数据分析和营销支持帮助IB发展业务。 我们相信为全球的外汇,差价合约和现货黄金和白银交易商提供最好的服务,支持和交易环境,使他们能够在我们的METATRADER 4 PLATFORM上交易全球市场。君诺金融MT4平台提供无与伦比的各级执行质量交易商。

Processing...
Thank you! Your subscription has been confirmed. You'll hear from us soon.
ErrorHere