Have you ever noticed that prices seem to drop right after you buy, and just as you sell, the price suddenly skyrockets? It's not a curse, and no, the market is not targeting you.
1. Crowd psychology and herd behavior
driven by FOMO (Fear of Missing Out). Conversely, during a downturn or sharp correction, panic sets in and most investors sell at a loss to 'cut losses'. The behavior of large institutional investors and algorithmic trading.
2. Large institutional investors, trading bots, and hedge funds dominate a significant portion of the market. What looks like a random price reversal to you is often a carefully calculated move made by these entities.
Organizations spend billions each year on market research to understand investor behavior and predict movements.
The key to avoiding these common pitfalls is to think differently and manage emotions effectively:
1. Avoid emotional decision-making:
2. Set clear goals: Decide in advance the price at which you will buy or sell. Stick to this plan and avoid greed or fear during corrections.
3. Detach and refocus:
4. Understand the nature of the market: The market will always move up and down - that is part of the cycle. Instead of chasing quick profits, learn to take advantage of larger trends with patience.
Final thoughts
The market is not silently against you - it simply reflects human behavior and organizational strategies. To succeed, you must stop thinking like the crowd and start making calculated and disciplined decisions. Understand the mechanics of the market, manage your emotions, and most importantly, stick to your strategy. Don't let temporary volatility shake your confidence - stay focused, keep calm, and know more than others.
