The harding phenomenon is a word that comes from the English word “Herd” (flock), and means that human beings tend to act according to the thoughts of others and many people. Speaking of phenomena that are familiar to us, we buy products that are in fashion, and the queues call for more queues.The Harding phenomenon is known as one of the insights in “behavioral economics”, but a synonym in behavioral economics may be the “bandwagon effect”. Behavioral economics has the perspective that “humans seem to be rational and behave irrationally” and “the economy created by humans also has irrationality born from such a psychological aspect”, and stock investment and economy It can be said that it is one of the academic fields that are attracting attention in economics. We can see this tape of irrational behavioral action lots of times in financial markets when we see when price makes big divergence agains company fundamentals.
Interesting but contains dangerous ideas for new traders.
The conclusion drawn is that if a price is rising due to irrational beliefs and behaviours of the mass of buyers, the rational response would be to sell. This is baloney.
Soros calls this the theory of reflexivity. It is based on the idea that feedback loops between expectations and economic fundamentals can cause price changes that substantially and persistently deviate from equilibrium prices .
Are you looking for books related to the Harding Phenomenon? It’s a pretty new concept to me too so I’m not familiar with any. But, if you wanna read about trading in general, maybe you can try one of these books!
Disagree - the logical response Would be to sell - BUT timing is the problem - we all knew that the Dot-com boom of teh '90’s was wrong - but it went so for years - and many people made fortunes trading it - THEN the bottom fell out ! - Crypto may go the same way - we’ll see - but as you say - shorting it with the sort of leverage we are forced to use is unlikely to succeed
A boom or a bubble or whatever is just another uptrend. For all new traders on babypips, whatever strategy you’re using, always check that if price is in an uptrend you are never short: and that if price is in a downtrend, you are never long.
That simple discipline could save your account. It would have saved it in the dot-com boom. It would have saved it against 9-11. It would have saved it against the EUR/CHF collapse.
There is some truth in that - but my biggest ever trading loss - was made trying to get in on a long term trend on the DOW 2003 When the trend turned 2 hours after my entry ! - I suspended trading at that point and we (2 of us) went for a 3 week all inclusive holiday in the Caribbean - whilst I thought about what I’d done wrong - the Holiday including transport, car parking and everything cost less money than I’d lost !
Can’t almost any analysis fall into this category? Like trading based on price hitting and breaking through certain moving averages? If enough traders believe in something, price tends to do similar things around that same event?
The forex players who move price are the big banks. If all the private retail traders in the world saw the same signal at the sane time and all decided to get into that market right away, we still would have only the tiniest temporary effect on a pair’s exchange rate. I don’t think the big banks’ strategies are based on waiting for MA crossovers or a Three Black Crows.
Even bad retail trader can be good bank trader, bank traders have a big advantage, they see clients’ flow and can front-run it easy, most times they just cover the spread between mkt and client for fx, Eurobonds and other money instruments… many of them even don’t know well technical analysis… So it’s a completely different business…
Need to learn more about Harding Phenomenon, because Im closing too early profitable trade and holding loss position its making my trading not profitable
Correct. See the sentiment figures from your broker. If the chart shows an established steady uptrend, the great majority of traders with open positions will be short. Brokers also state that the great majority of their clients are losing money. If the majority are losers, and you do what the majority are doing, you will also lose.
Note that the people who are making the uptrend are the big banks. They will be long. Big banks don’t get wiped out.
Agree, most of sentiment indicators are trash in and trash out, I lost lots of money by using sentiment of one great elliote wave sentiment guru trader… after this I only using thins that work
But, if you wanna read about trading in general, maybe you can try one of these books! 
Hmmm. I mostly trade forex and HODL crypto. 
How about you? 
Interested in other markets? 
