Dear Everyone,
I'm writing this because it's important, even though it's a bit long. I know many of you are feeling both excitement from gains and disappointment from losses. I want to explain how market cycles work.
Market cycles are predictable and happen over and over again. Similar to how casinos operate, financial markets are designed to tempt regular traders into losing money. Casinos use statistics and take advantage of human emotions to make profits, offering small wins to attract more people and keep them playing. Financial markets work similarly, controlled by smart entities.
Let's take the cryptocurrency #LUNARtoken as an example. Some people bought it at $1, saw it rise to $7, took their profits, reinvested, and ended up losing everything. This pattern of chasing profits out of greed is common.
From what I've seen, here are four types of market cycles and the feelings that come with them:
1. Accumulation: This happens after a big drop in prices. People feel scared, hopeless, and sad. Many hesitate to buy more because they worry the prices might drop even more.
2. Uptrend: After accumulation, the market starts to go up again. Even though some people are still afraid, prices go higher, making those who didn't buy earlier regretful. Eventually, the fear of missing out (FOMO) pushes them to buy, often when prices are at their highest.
3. Distribution: The people who control the market create excitement and optimism. They spread good news to encourage regular investors to buy more. This provides a way for them to sell their own holdings at a profit.
4. Decline: Once excitement reaches its peak, the market starts going down again. At first, people see this as a chance to buy more. But if prices keep dropping, it leads to fear, sadness, and panic selling, which can result in big losses.
These cycles repeat themselves. Understanding this and remembering it can help you make money consistently over time.
Stay tuned for more helpful advice.