The Psychology of Market Cycles

🧠 Why Do We Buy High & Sell Low?

Because markets are ruled not just by charts—but by emotions.

🚀 Uptrend: Euphoria & FOMO

- As prices rise, dopamine kicks in—creating excitement.

- FOMO kicks in via social platforms like X and Reddit.

- We buy based on hype (think meme coins), not value.

📉 Downtrend: Panic & Denial

- When prices fall, the brain’s amygdala triggers fear.

- Loss aversion feels worse than missing gains.

- Panic selling or holding in denial (cognitive dissonance) takes over.

🧬 Neurobiology Behind Market Behavior

- Dopamine fuels the bull market thrill.

- Amygdala drives fear during bear markets.

- Mirror neurons cause herd behavior—we copy others.

📊 Case Study: TRUMP Meme Coin

1. 🚀 Dopamine Rush: Massive hype triggered euphoria.

2. 👥 Herd Mentality: Traders followed the crowd.

3. 💥 Crash: Volatility hit. Fear took over. People sold.

🧘 Key Takeaway

Mastering markets means mastering yourself. Learn the cycles. Avoid emotional traps. Let logic lead.

📌 Disclaimer: This post is for educational purposes only and does not constitute financial advice. Always do your own research and consult a financial advisor.