Explained from a psychological perspective,
Why are the effects of three rising waves and three falling waves so significant and the indicators so effective.
First, the first wave of an uptick usually doesn’t attract much attention;
By the second wave, the market began to realize the rise, and everyone entered the market one after another;
By the third wave, market sentiment exploded, and many people increased investment, thinking that a bull market was coming.
But at this time, the third wave is often coming to an end, and as a result, most people are trapped at the high point.
The same goes for three down waves.
The first wave of decline is regarded as a slight correction, attracting people to buy the bottom;
When the second wave continues to fall, the bottom hunters firmly believe in long-term investment;
By the third wave, most people have exhausted their funds, suffered serious losses in the first two dips, and finally panic and cut their flesh. At this time, the market is often close to the bottom and is ready to usher in a new round of rise.
This pattern appears repeatedly, and recent market trends confirm this. History is always surprisingly similar, whether it is the trend in the first half of 2023 or the trend in the second half of 2019, they are exactly the same.
