How to Use Herd Instinct in Forex Trading

Herd instinct is as a word an inclination in people or animals to behave or think like the majority of people around them. In trading this means that first observing and then following whatever the entire market as a whole is doing, there are several ways this type of behavior can be explained. One of which is the sociological approach which suggests that the reason behind the existence of herd instinct is social conformity and determinism; individuals feel the need to be accepted by society and think that the only way to be accepted is to mimic all the actions of most of society.

How to Use Herd Instinct in Forex Trading 
Herd instinct can quite easily be used by traders; all they need to do is to base their trade on whatever most of the traders are doing and whatever the market trends are. The trader should see where the market is going and go along with it, blindly following the pattern.

Tips to Using Herd Instinct in Forex Trading 
1. While using a trend, remember to always have a well thought out exit strategy, despite the fact that staying in a herd provides safety in number, it’s often likely to get held back when it’s time to exit the trade as everyone competes with one another to make it out as expertly as possible.

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