From Eye-Opening Realization? Understanding the True Charm of FX — What is the Crowd Psychology of the Market? — [Iidatchi-sensei]
Profile of Iidaッチ Sensei
Former instructor at a prep school. Loves hot springs and holds a hot spring sommelier qualification; a professional FX trader. Using the method called "Close Price Trading Method," they have trained many excellent traders, and in online study sessions, participants from all over the country—from the elderly to the young—are learning. The chart analysis method that emphasizes the "close price" is popular among part-time traders as a trading approach that does not require constant focus on 24-hour markets.
Blog：A Huge Comeback from 100,000 Yen! FX Trader Iidatchi BLOG
Twitter：https://twitter.com/iidatchi
※This article is a reprint/edit of an article from FX Guide.com, September 2020 issue. Please note that the market information described in the text differs from current market conditions.
FX and Psychology
Hello, this is Iidaッチ Sensei. Previously, I explained why recovering losses is difficult. For example, if you start trading with 300,000 yen, lose 100,000 yen, and try to recover 100,000 yen from 200,000 yen, you would be working to regain half of your remaining capital from a loss of one-third of your total funds. It requires more effort than simply increasing 100,000 yen from 300,000 yen. Therefore, I wrote that losses must be approached with extreme caution in trading, and I also suggested one possible solution; if you haven’t read the previous issue yet, please take a look.
Now, when Iidaッチ Sensei first started FX, I often saw phrases like "Charts reflect human psychology" or "Only by discerning the crowd psychology of the market can one succeed." At that time, a female trader I knew studied psychology at an open campus of a certain university to learn crowd psychology (this is true). I personally think one should learn trading techniques properly first, but that woman seemed the type who wouldn’t listen to others’ advice and relentlessly attended the university open campus.
Even when Iidaッチ Sensei saw the phrase that charts reflect human psychology, he didn’t think deeply and simply muttered, "Huh, I see." However, recently, self-proclaimed psychology traders and mentalist traders have become more prominent, prompting Iidaッチ Sensei to have various questions. Therefore, in this issue, based on more than ten years of experience in FX trading, I will try to solve those questions.
