Yes, indeed ... as long as they're not cats, bears or any other furry animals mentioned above: I'm not convinced that would really be linguistically acceptable ...
Lot's of advice here that focuses on the herd, and not on the individual... Find a less crowded space where you can find an edge. Leverage what you know already and find ways to build on that. If everyone is trading SPX any edge you're working on is probably already stale and well known to other traders. If everyone is focusing on price, find something different there. Everyone is watching prices, everyone is looking at indexes. The herd is trading price, the herd is trading indexes / ETFs. You can follow the herd, and watch the herd, but if you're with the herd, you're eating from chewed grass. Find a greener pasture near the herd, and be ready to move if you see them moving. For me, I realized pretty quick that price wasn't my thing. Being in insurance, I realized that risk management is my thing. There's not a lot of people who focus on trying to cut risk while increasing exposure to the market--and there's even fewer who do that with ATM options. I migrate with the herd, but I feast away from them. But being out here all alone, I'm an easy target if a bear gets the drop on me--so I keep tabs on what the herd fears, and I'm pretty quick to bolt at any hint of fear, real or perceived. The inference one would draw from this is exactly the herd mentality. Lol...I do often feel like I'm herding cats.
The "herd or masses" is general public and either being bullish/getting out for longer term. If one is talking about individual chart patterns or failures of them, I believe larger traders look for failures, but Hedge funds or Mutual funds certainly have way too much volume to get done to mess with what retail do with small accounts under $25k day trading. I don't know of any of them that deal with day trading other than HFTs which are quant signals. I think retail are greatest amount of trendline support/resistance traders. Where retail lacks is risk management, I think hardly any study on how to risk or when not to take an other than viable trade, ie what is chart showing us when not to take that signal. Masses often times can't read when highs are too high and how to hedge. Many unaware of strength of trend, duration, what is slope and how to place filters in place when end might be near. Filters don't stop you from necessary get you out, but show when to slow down adding more. But most important is how to get risk to very very low, this takes much study, your risk dictates number of contracts, if you usually risk $1,000, what does it take to reduce risk to $100 and then do 10 contracts. Most my signals are not "feel good" entries, they most likely entering against the trend instead of waiting for a breakout, am trading with trend, know the breakdown of mean average of congestive waves, retracements. People don't study enough, X crosses Y means little in trading, don't trade reports cause I do, don't sell new contract highs-I do but waiting for a pattern. Breakouts to me are most risky, rather wait for breakout then retracement to where I think weak funded traders stops are to get in. Don't average down, but I do. And why? I study 40 hours a week on how to do so. As Spock would say "That's not logical" is most likely not place where masses get in but those who have played game long time. Quality of life, those who have hobbies can retire to do them and others who never saw trading as work will do so till the grave. Another surgery on Friday for me, damn.
Should this be thought of as saying that retail traders even make up a massive enough group to produce an effect on the market?
I read somewhere that retail is approx 5% of the cash market. Cant remember where I read that. During liquid sessions wgaf what what the retailers are doing anyway, even if I knew real time how retailers were positioned I still wouldnt factor that data into my decision making.
Absolutely no effect on forex prices. That said, you can discover what retail traders are doing by looking at sentiment indicators as on the Oanda website and others. It might be a safe bet to simply go opposite what the majority of their clients are doing.
Everyone seems to define the herd as uninformed, dumb, blind, goofy retail traders. And the institutional guys with their Ph.d's, BB, AI and all the available information that there is in the world right at their finger tips as the Gods of the markets who could do no wrong. But everyday you can see big blocks of thousands of contracts being bought right at the top and dumped right at the bottom of trends. So the herd can be made up of many kinds of animals, can't it?