7. Understanding Market Dynamics: Mood Swings, Feelings, and Irrationality

Billions of dollars are made and lost in the stock market each day due to simple human emotions. You might have reams of financial data, a team of insightful analysts, and sophisticated computer programs, but they will prove useless against the feelings and emotions of market participants. If you understand the moods, emotions, and psychology that drive investors, you have the most valuable insight you could possibly possess to make money in the market.

Shark Investors are keenly aware of the human element of the market. They use their insight into mob behavior and psychology to maximize their profits. This chapter explores some of the common themes that arise in the ...

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