Crowd sentiment

Discussion in 'Trading' started by illiquid, Feb 14, 2008.

  1. Have you ever heard the saying to the effect that crowds are generally right during the middle of a move but wrong at the turns? Is this not a complete, whatchamacalit, tautology? Akin to "it works, until it doesn't"?
  2. Fangdog


    I like crowd sentiment described this way; 80% are wrong 80% of the time and 20% are right 80% of the time. 80% will buy within 20% of the top and 80% will sell within 20% of the bottom. I guess it explains why only 20% buy their whiskey with cash.

  3. Ha, I agree 100%. I've always used the saying "80% of the population are idiots". Instead, I should switch that around to 80% of people act like idiots 80% of the time. lol. Good one.

  4. Unfortunately stock markets works with crowd psychology, which is very negative at the moment, which translates into a Bullish Bias for the markets.