⏳Waiting for a bull market... Part 4.
"Golden Rules" by Bob Farrell
8️⃣ Three stages of development of bear markets: a sharp drop, a reflective rebound and a fundamental downtrend. A sharp and strong fall will often mark the start of a bearish trend. Then there is a rebound and a slight increase, after which a slow long-term downward trend develops.
9️⃣ If analysts and experts agree on the same opinion, exactly the opposite will happen. This rule refers to rule 5 and calls, in essence, to trade against the market - to think about buying when the mood around the stock is pessimistic, and about selling when you hear only good things about the stock.
🔟 A bull market is more fun than a bear market, or a rising market is more pleasant than a falling market. The first causes feelings of euphoria, “dominance” and greed, while the second causes fear, panic and depression. Like gamblers, investors are confident in their intelligence and ingenuity when they win, and in their failure when they end up losing. However, the market is cyclical, and fear and greed will catch up with every “wise man” and “loser”. So the really important question to ask yourself is are you prepared for a bear cycle?
