Influence of fear-greed and intellect on our trading

You understand that you had a mistake but you don't know why. If you don't know
why, the best thing is to stick to the rules strictly (stop loss and take
profit). In case you know why you made a mistake, you would flat the position
right away.

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Beside having a loss, I recognize that I had made totally wrong interpretation
of the graph at the start. Everything has been showing the other direction of
price movement.

Now when everything is over and emotions are gone, intellect is active again, you
see the picture logically as it was on the beginning.

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Example 2

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"I will watch price movement for a while, I don't have any intention to open a
position today at all"!


This kind of decision makes you absolutely comfortable - today you will just
watch the graph without any obligations.

There are no emotions and your intellect is active.

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I am feeling comfortable. I am watching the price movement, analyzing, waiting,
but there is nothing. I take a break and watch TV.
After some time I come back to the market and watch for a while.


Still there is comfortable feeling which proves that there are no emotions and
our intellect awareness is active.

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In a moment I notice the algorithm (regularity that is repeating).
I define a certain spot of entrance, stop loss and take profit.
I say to myself:" Let me see if I am right, would price come to spot of entering
into the position?" After some time price is exactly at the spot of entry.

Knowledge based on intellect.

8

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I am getting into the position.(if price doesn't come to the spot of entry I pass
that opportunity).


Decision made on intellect basis. After entering into the position there is a
good feeling!

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Who would say that the enemy is hiding at the beginning, right between breakfast
and my way to the computer!!!

The foreign exchange market is open 24 hours a day, split over three time zones. computer screens continuosly show exchange rate prices. A trader enters aprice for the USD/CHF exchange rate on his machine and can then receive messages from any where in the world from people willing to meet that price. It does not matter to him whether the counter parties are sitting in london, mumbai or in New York.

The 24 hour inter-bank literally follows the sun around the world, moving from major banking centers of the United States to Australia, New Zealand to the Far East,
to Europe then back to the United States.

The Foreign Exchange market has no physical venue where traders meet to deal in currencies. When the financial press and economic text books talk about the foreign exchange market they refer to wholesale tier.

The plays in the foreign exchange market are speculators, corporations, commercial banks, currency brokers and central banks. corporations enter into the market primarily as hedgers. However corporations might also speculate. Central Banks tend to be speculators, that is, they enter into the market without covering their positions. Commecial banks and currency brokers primarilyact as intermadiaries. However, at different times, they might be also speculators, arbitrageurs and hedgers. All the parties in the foreign exchange market communicate through traders or dealers.

Commercial banks account for the largest proportion of total trading volume. In 1995,the BIS reported that 89 percent of all foreihn exchange trading was either inter-bank (74%)or between banks and financial institutions including investment houses and securities firms (15%). Only 11% of the trading was done between banks and corporations. The high volume of inter-bank trading is partially explained by the geographically ispersed nature of the market and the price discovering process.