The Psychology of the Foreign Exchange Market
Chapter One
From Rational Decision-Makers
to a Psychology of the Foreign
Exchange Market
* * *
What is the foreign exchange market? Is it a part of human rationality? I don't
know. Ask Rene Descartes or somebody, not me!
Foreign exchange trader
From the outside, financial markets appear "dry, technical, and economic in
nature-[all about] percentage declines, volume, margin calls, and paper losses.
[However, their] inner mechanism is psychological. All markets, financial or
otherwise, are arrangements where goods, money, and real and financial assets
change hands. It is vital to remember that the hands are human and are
attached to thinking, feeling hands and bodies," according to economist
Shlomo Maital. Or, as articulated by James Grant, of Grant's Interest Rate
Observer, markets "are normally as objective as people watching the ninth
inning of the seventh game of the World Series, with the teams at a tie."
The ... read full excerpt from The Psychology of the Foreign Exchange Market ebook
