Hey, Traders
Today we want to dive into the Wall Street Cheat Sheet, which is one of the most iconic representations of market cycles in relation to investor emotions. This cheat sheet provides a graphical representation of the psychological journey of investors during a market cycle.
Stages of the Wall Street Cheat Sheet:
Optimism: The initial stage where investors believe the market will move in their favor.
Belief: As the market starts to show gains, there's a growing belief that the rally is real.
Thrill: Investors are thrilled with their smart choices and start to believe they can't lose.
Euphoria: The peak of the cycle, where maximum financial risk is taken as everyone
believes they should get in.
Complacency: After the initial drop, there's a belief that the market will bounce back.
Anxiety: As prices continue to drop, denial sets in, and investors hope the market will
recover.
Denial: Investors believe that their assets are great long-term, and they just need to wait
it out.
Panic: The realization that prices won't recover soon, leading to hasty decisions.
Capitulation: The point where investors decide to get out of the market to avoid further
losses.
Anger: Investors look for someone to blame for their losses.
Depression: Realization of the magnitude of loss and reflection on decisions made.
Disbelief: As the market starts to recover, there's skepticism about its sustainability.
Understanding the emotions behind each phase of the cheat sheet can help traders make more informed decisions. By recognizing the current emotional state of the market, traders can avoid getting caught up in the herd mentality and make decisions based on logic and analysis rather than emotion.
This time we used a chart from past BTC times but try to look at current state of BTC and try to figure out where are we currently at :)))
Today we want to dive into the Wall Street Cheat Sheet, which is one of the most iconic representations of market cycles in relation to investor emotions. This cheat sheet provides a graphical representation of the psychological journey of investors during a market cycle.
Stages of the Wall Street Cheat Sheet:
Optimism: The initial stage where investors believe the market will move in their favor.
Belief: As the market starts to show gains, there's a growing belief that the rally is real.
Thrill: Investors are thrilled with their smart choices and start to believe they can't lose.
Euphoria: The peak of the cycle, where maximum financial risk is taken as everyone
believes they should get in.
Complacency: After the initial drop, there's a belief that the market will bounce back.
Anxiety: As prices continue to drop, denial sets in, and investors hope the market will
recover.
Denial: Investors believe that their assets are great long-term, and they just need to wait
it out.
Panic: The realization that prices won't recover soon, leading to hasty decisions.
Capitulation: The point where investors decide to get out of the market to avoid further
losses.
Anger: Investors look for someone to blame for their losses.
Depression: Realization of the magnitude of loss and reflection on decisions made.
Disbelief: As the market starts to recover, there's skepticism about its sustainability.
Understanding the emotions behind each phase of the cheat sheet can help traders make more informed decisions. By recognizing the current emotional state of the market, traders can avoid getting caught up in the herd mentality and make decisions based on logic and analysis rather than emotion.
This time we used a chart from past BTC times but try to look at current state of BTC and try to figure out where are we currently at :)))
Note
Check this one out as well as this is backing up the information from our post!
The Four Major Phases of Market Cycles
Accumulation Phase:
Characteristics: This phase marks the end of a downtrend. Prices have bottomed out, and smart investors begin to "accumulate" or buy assets, believing that the market has reached its lowest point.
Trading Strategy: Look for signs of stabilization and consider buying into assets that show strong fundamentals and potential for growth.
Uptrend (Bullish Phase)
Characteristics: Prices start to rise as a result of increased purchasing and positive sentiment. This phase often sees the most substantial price gains with 2x-4x-6x-10x and so on.
Trading Strategy: Ride the wave! Consider buying and holding assets during a smaller correctional movement that happens, but always be on the lookout for signs of the next phase.
Distribution Phase:
Characteristics: After a long uptrend, prices start to come down. Smart investors begin to "distribute" or sell their holdings, anticipating a market top, but it won't happen in a day or two; it will take months. So if you see the price stuck in sideways movement for too long, we would consider selling at least some of our assets!!
Trading Strategy: Be cautious. Consider taking profits when you feel that crypto is getting too popular. Look for signs of weakening momentum.
Downtrend (Bearish Phase):
Characteristics: As a result of increased selling and negative sentiment, prices start to fall. This phase continues until prices bottom out, leading back to the accumulation phase.
Trading Strategy: Consider short-selling strategies or moving to safer assets. It's essential to protect your capital during this phase. But remember, never sell 100% of your assets!
Note
"Belief Stage" in current market situation, let's see if this chart will mark once again the repeat of history
🚨 Authentic Traders
⚡️ Short-Term + Mid-Term Trades
Keep an eye on us and you will not regret it. 😉
Telegram: t.me/+fiEDSn7M9pJkODA0
⚡️ Short-Term + Mid-Term Trades
Keep an eye on us and you will not regret it. 😉
Telegram: t.me/+fiEDSn7M9pJkODA0
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
🚨 Authentic Traders
⚡️ Short-Term + Mid-Term Trades
Keep an eye on us and you will not regret it. 😉
Telegram: t.me/+fiEDSn7M9pJkODA0
⚡️ Short-Term + Mid-Term Trades
Keep an eye on us and you will not regret it. 😉
Telegram: t.me/+fiEDSn7M9pJkODA0
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.