ivanlim wrote:I was wondering why do so many traders enter at the wrong price,ending up losing money?
The "wrong price" for one person obviously represents the "correct price" for another.
I think you'll find the primary reason folks (usually amateurs with no industry training or exposure) lose money is because they're inadequately prepared for the type of endeavor they're undertaking.
In other words, they invest money into an arena where they're totally unprepared & raw both financially & psychologically.
ivanlim wrote:When they see a strong uptrend,making a new high,many traders buy the currency pair.
I guess it all depends on their interpretation, definition & understanding of what constitutes a strong trend?
Also, are you talking about new intraday highs?....or new intra-week highs?...or new intra-month or intra-year highs?
There are very different scenarios & events that will dictate & influence how players view & trade these technical zones.
If folks spent more time investigating & observing the behavior of price as it moved & worked around supply & demand zones, they'd begin to realize that trends really don't carry quite as much clout as they originally thought.
ivanlim wrote:But why does the price reverse,since there are so many buyers in the market?
How do
you know so many people are buying the market?
How do you know they're not scaling out into strength? (selling to new & late entrants).
The only reason price reverses is because there are less folks buying & either more folks prepared to "offer" or sell at a specific level, or take profit (which by the very nature of its function, automatically instigates an order in the opposite direction), meaning they cancel out their long order & sell to close out the position.
In other words,
supply enters the market to either stall or reverse the price, & more often than not, it enters the market at a zone that previously turned or stopped the price flows