How Often Does The Market Overreact?

Nowler

Active member
Sep 13, 2017
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#1
Perhaps confining this question to the most liquid FX market (EUR/USD) might be best, but if someone feels bold and confident enough, perhaps they can extend it to: EUR/USD, GBP/USD, USD/JPY and USD/CHF

How often does the market overreact? Let's exclude "slight to moderate overreactions" so that we are only dealing with considerable to extreme overreaction.

I realise that this may not be easy to accurately define... perhaps rating your answer on a scale of Rare, Somewhat Rare, Somewhat Often, Often (please include the market/s you are referring to).


- Gavin
 

FXX

Well-known member
Oct 12, 2017
1,135
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#4
Best thing you can do when thinking how the market will react is to look at it as a person.
 

Nowler

Active member
Sep 13, 2017
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#5
Best thing you can do when thinking how the market will react is to look at it as a person.
I have noticed people doing this but I wasn't really sure how to approach it...
I'm trying to be as careful as I can so as not to pick up maladaptive cognitions/behaviours but it's a minefield! And commonly results in me standing there, stumped :eek:
 

tomorton

Well-known member
Feb 28, 2002
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Exeter
#6
It can't overreact and it can't be irrational. The market does what it does, it can only act - it is individual participants who can overreact and who can be irrational.
 
Feb 16, 2016
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#7
Maybe I will never find an answer to this question. But in truth, that's our purpose of trading - to understand the market.
 

DFM8

New member
Feb 14, 2018
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#9
there is no purpuse to trading other than to try to make money to get by in this pissy system we live in