Beware the thoughts of others! :eek: We’ve talked about this before, and it is a very important point. Reading the sentiment expressed by other traders/market watchers is an insidious thing because of how it can dilute the potency of our own analysis. Whether you’re wrong or right, it is at least important be resolute, not waffling about with no real idea, but placing trades with a thousand conflicting thoughts from myriad voices in your head. Much of the time I pay no attention whatever to analytical commentary from others, whether in forums or from news outlets.
Here’s a post from my blog back in April on this very point. A little long and wordy; but then that’s nothing new, right? 
[B]Selective (Market) Ignorance[/B]
Price action is the single inherent function of the marketplace: fractal in scope, present at all times in the tension between divergent perceptions of value and the streaming drama of supply and demand. Each trader is a free agent acting within a seamlessly fluid environment where mass alignment and antagonism build and collapse out of the limitless, blurred disparity of the market’s individual participants. Put simply, price is the single-point description of the cacophonous din of the market crowd.
This week [this is from early April 2008] brought with it significant short-term moves for the USD and JPY that, taken in the isolation of the timeframe in which they occurred, are contrarian in direction but do little to subvert the prevailing long-term outlook for them. Countertrends, then, which are nothing atypical. The concrete analytical rationale for these temporary retracements in price action are very important to observe and study. Whether you employ a methodology yielding trend-following trades, countertrending movements, or both, it is all too commonplace for a trade to get stopped out at the very bottom of a pullback, whipsawed, or otherwise derailed by a momentary hesitation in price which then resolves itself into the direction you initially anticipated. All of this is why placing stops is so often referred to as an art; but this isn�t about placing stops, although the non-perfunctory, situational manner in which they ought to be placed (and which makes them so difficult to get right) tells us a lot about the structure of the marketplace.
Getting back to the examples from this week, notice the common perception of the USD and JPY: generally, the USD is thought to be on an at least medium-term depreciative march across the board, while the JPY has been advancing steadily against all the majors (though it mostly neutral vis-a-vis the Euro). Certainly the consensus of economic data corroborates, and our charts plainly bear out the psychological bias reflected everywhere from the COT to any number of blogs or message boards.
In this market context of mass alignment, taking a trade that creates disparity and antagonizes the sentiment of the crowd, even if you�re reliably certain of its positive outcome, is very difficult and can be full of misgivings when you know the spoken bias of the market is against your own analysis. Is this an incontrovertible sign you�re wrong? No, but it�s immensely challenging to suppress the notion that you are. Even if you do take the trade, the likelihood you will maintain your position if it goes against you initially is probably much lower because it will be immediately perceived as an affirmation of the bias you�re opposing. Nevertheless, this week (Friday aside) there were some excellent trade opportunities across the market long the USD and short the JPY (note: this isn’t a reference to USD/JPY, as such). Again, nothing atypical.
I do not recommend reversing positions anticipating retracements, picking tops and bottoms, trading countertrend or ignoring the wider sentiment of the market: that�ll get anyone killed almost as quickly as throwing a suitcase of trading capital off a bridge, no matter how adept the analyst. What I am getting at is this: where an analysis of price that is our own (based off raw chart and statistical economic data only) is then informed by a perception of the mass consciousness and collective bias of the market, that perception can and does induce faulty analysis and irrational decisions. Sometimes, without the perception, trades we would�ve been scared out of are taken for hundreds of pips, or trades we would�ve been certain of on the basis of wider market bias almost immediately proceed to our stop price.
Ignoring the market is not an answer; but slavish adherence isn�t either. So, we have to cultivate and keep in mind the practice of another art, easily referred to but difficult to describe: selective ignorance, or the purposive filtering of expressions of sentiment to arrive at a balanced apprehension of the currency or pair analyzed. Paradoxically, conscious selectivity of what one knows and doesn�t know about the market (or anything else, for that matter) begins with acknowledgment that selectivity is necessary, and by development of one�s own faculty of self-awareness to know whether bias or irrationality is present in their analysis.
Try this: “Remember that whatever does not confirm a reversal in a trend is merely a pullback in a trend.” This corresponds exactly with what Jocelyn just posted. Discriminating between reversals and pullbacks/retracements/throwbacks may seem like so many shades of gray, but it can be done reliably and profitably.