#TradingPsychology

The difference between a correction and a crash: Do not let emotions drive your investment.

While the difference between them is significant and very important. A correction is a natural movement in the markets that occurs when prices rise for a period and then begin to pull back by a reasonable percentage, restoring balance before continuing to rise. On the other hand, a crash is a sharp and sudden decline in which the market loses a large part of its value in a short period of time, usually associated with major events or a loss of confidence.

The common mistake is to treat every decline as a sharp crash, which leads some to sell at a loss out of fear. The market requires conscious reading and logical analysis, away from emotions and quick reactions.

If you see the market declining, do not rush. Ask yourself: Are there strong news? Is the market correcting after a long rise? A calm assessment can save you from wrong decisions.

Always remember: markets correct themselves and that is normal. Do not be a victim of your mood swings, but base your decisions on understanding and analysis, not on fear and greed.