🧠 The Psychology of Market Cycles: Why Emotions Drive Every Boom & Bust
Understanding market cycles isn’t just about charts—it’s about human behavior.
🔄 Stages of a Market Cycle:
1. Optimism – “This is the start of something big.”
2. Euphoria – Prices soar; FOMO kicks in.
3. Complacency – “It’ll bounce back.”
4. Anxiety & Denial – Early signs of decline ignored.
5. Panic & Capitulation – Fear dominates. “I should’ve sold earlier.”
6. Despair – The bottom. Most give up.
7. Hope & Recovery – Smart money enters. Sentiment slowly shifts.
📊 Key Insight:
Emotions lead the market more than logic. Recognizing which phase you're in can give you an edge over reactive traders.
🧩 The winners? They buy when fear peaks and sell when greed blinds. Stay disciplined, not emotional.
