Human beings are pattern recognition machines. That's how we survive. Unfortunately this machine spots way too often a pattern where none is.

Traders are especially prone to be an overly sensitive pattern recognition machine.

I have just read a new book I think all should take a look at. "Fooled By Randomness" The Hidden Role of Chance in the Markets and Life. Written by Nassim Nicholas Taleb.

New traders should read this slowly. Old traders should read it carefully. New traders need to understand what he is saying because if they do not understand it now, the day will come when they do