Definition – What does Chasing the Market mean?
Chasing the market refers to a currency trader who reacts late to market trends. By reacting near to the end of a trend, traders lose money.Traders can lose sight of their investing strategy if they get caught up chasing the market.
ForexTerms explains Chasing the Market
Traders who are chasing the market are usually acting on emotions rather than on rational analysis. Momentum traders chase the market in a professional sense, seeking to ride strong trends to a quick profit, but the vast number of traders chasing the market are doing it with no coherent strategy. When an trader finds that he is simply reacting to the news of the day, it is time to sit down and think about whether the trades still resemble the initial strategy.
