Have you ever wondered why so many traders struggle to succeed, even when they’re using the same trading strategies as everyone else?
What if the very thing that feels safe—following the crowd—is the most significant risk in trading?
Most of us are naturally drawn to follow the crowd. It’s a survival instinct that has helped humans thrive for thousands of years.
But in trading, this instinct can backfire. Following the crowd often leads to failure.
Why does this happen, and how can you avoid falling into this trap? Let’s dive in.
Ancient Wisdom: The Story of King Croesus and the Oracle of Delphi
Long ago, there was a wealthy king named Croesus who ruled the kingdom of Lydia. He was known for his immense riches and powerful army.
One day, Croesus decided to attack the Persian Empire led by King Cyrus. But before going to war, he sought advice from the Oracle of Delphi, a prophetess known for her wisdom.
Croesus sent messengers to ask the Oracle: “If I go to war with Persia, what will happen?”
The Oracle replied with a cryptic message: “If you cross the river, a great empire will fall.”
Croesus was thrilled. He assumed the Oracle meant his enemy’s empire would collapse. Confident in this prediction, he led his army across the river and into battle.
But instead of victory, he faced a crushing defeat. His own empire fell, and the Persians captured him.
The Oracle’s prophecy had come true—but not in the way Croesus expected. The “great empire” that fell was his own.
Croesus made a critical mistake: he didn’t think independently. He assumed he knew what the Oracle meant without analyzing the situation carefully.
Croesus thought he understood the Oracle’s words—but he assumed, didn’t question, and followed his own bias. Traders often do the same: they assume the crowd must be right, and act without deeper analysis.
This story holds a powerful lesson for traders: blindly following others, no matter how reliable they seem, can lead to disaster.
Three Hidden Dangers of Following the Crowd in Trading
Now, let’s uncover the three key reasons why following the crowd in trading is a recipe for failure:
The Illusion of Safety: When everyone is doing the same thing, it feels safe, right? Wrong. In trading, this illusion of safety can be dangerous.
If too many traders jump into the same trade, prices can become artificially inflated. When the bubble bursts, those who followed the crowd suffer heavy losses.
Why risk being part of the herd when you can think for yourself?
Emotions Over Logic: Have you ever felt the urge to buy or sell simply because everyone else was doing it? That’s the power of crowd psychology.
When traders follow the crowd, they often make decisions based on fear or greed rather than logic. This emotional rollercoaster can lead to poor choices and significant losses.
How can you avoid this trap?
The Manipulation Game: Did you know that large institutions and savvy traders often exploit the crowd’s behaviour?
When everyone follows the same strategy, it becomes easy for these players to manipulate the market in their favour. If you’re part of the crowd, you’re essentially playing into their hands.
How can you protect yourself from being manipulated?
The Secret to Success: Independent Thinking
So, how can you avoid these traps and set yourself up for success?
The answer lies in independent thinking.
Instead of following the crowd, create your own unique trading strategy based on careful research and analysis. This approach requires effort and discipline, but the rewards are worth it.
Independent thinking does not mean figuring everything out without help. It means learning the correct principles and key concepts to make confident, well-informed decisions.
Take inspiration from legendary trader W.D. Gann, who refused to follow the crowd.
Gann believed that the markets follow natural laws and principles. He studied time, price, and market cycles to discover patterns that most people overlooked. His success came from thinking differently and understanding the markets deeply.
A Question to Ponder
Are you ready to break free from the crowd and take control of your trading journey?
What if the secret to success is not following others but having the confidence to make your own decisions?
Tired of following the crowd, it’s time to chart your own path. That’s precisely what we aim to help you achieve.
Our courses focus on providing you with the tools and knowledge you need to analyze markets objectively and with clarity.
We teach proven principles, not generic or mass-market strategies, so that you can gain an edge, trade confidently, and, most importantly, trade independently.
Learn time-tested, proven trading strategies—like the proprietary strategies we offer, based on WD Gann’s work—and arm yourself with the knowledge to make informed decisions.
We offer these trading strategies and courses to a limited number of serious traders, not to the masses.
The markets are full of opportunities—but only for those who dare to think independently.
Just because everyone believes something doesn’t mean it’s true.
History has shown that some of the greatest successes have come from those who dare to challenge conventional wisdom.
The more people believe something, the less profitable it becomes. Trade on your terms, not on what the market noise tells you. – Divesh
