The Psychology of Market Cycles

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Key Points

Optimism, greed, fear, and panic, rooted in neurological processes, shape market sentiment and are directly related to bullish and bearish trends.

Psychological traps like FOMO, loss aversion, and cognitive dissonance often lead traders and investors to make irrational decisions.

Social platforms can further amplify emotional ups and downs, while mirror neurons contribute to collective behaviors, herd instinct, and speculative trading.

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