@everyone

Why Correction is Needed During Bull Market?

Almost everyone hates correction or the situation when the "market is red". However, do you know that a red market during a bull market is very much needed and "must" happen. Why?

#1Forming a Healthy Market Structure.

A healthy market is a market that experiences correction. This means that structurally the market forms a higher high (HH) and also a higher low (HL) where when the market forms a higher low (HL) the market forms a "foot" that is ready to be stepped on. Higher low (HL) can be used as "support" that holds the market from falling deeper.

#2Flush Leverage in the System.

The price increase that occurs during a bull market is often "artificial" or the price rises much higher than it should because of the many traders and speculators who use leverage. This is relatively "unhealthy" because the increase does not occur organically so that when a liquidation event occurs that "cuts" the traders, the market can experience an organic increase again.

#3Reset Oscillator and Fear and Greed.

Confirmation indicators that traders often use before entering a position are the oscillator indicator and also fear and greed. When the market experiences a correction, there is a "reset" on the oscillator and also the fear and greed indicator which provides a better risk to reward for traders to scale in.

#4Eliminate FOMO.

When the market is green, usually many people start making purchases. Those market players who always "FOMO" are usually always a sign of "local top". Usually those who like FOMO also always complain when the market goes down and give a negative stigma to the market. Correction events can be used as events to "expel" people who like FOMO.