Every market moves in cycles. Prices go up, prices fall, and emotions follow.
Beginners often believe each cycle is unique. In reality, behavior repeats almost perfectly.
Prices start rising. News becomes positive. Early investors gain confidence.
Stories of easy money spread. New participants enter. Risk feels invisible.
Logic disappears. Valuations are ignored. “This time is different” becomes popular.
Prices fall sharply. Weak hands sell. Confidence collapses.
Humans respond to confirmation. When everyone feels safe, risk is actually highest.
Beginners buy near peaks and sell near bottoms — not because they are careless, but because psychology overpowers logic.
Data matters less than behavior in the short term. Emotions move faster than fundamentals.
Those who understand cycles stay calm. Those who don’t become liquidity for others.
Long-term investors accumulate during fear and reduce risk during excess optimism.
They don’t predict bottoms. They manage behavior.
Markets don’t punish lack of intelligence. They punish lack of discipline.
Understanding cycles is not about timing — it’s about survival.
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Disclaimer:
This article is for educational purposes only.
It does not provide financial or investment advice.
Market participation involves risk.