# Market psychology

Market, predictions, intuitive decisions – big emotions, masses with expectations and fear. 

The task here is to predict the behaviour of groups. 

The market is psychology. The better we understand it – the better we'll get. 

Not many write about it, for the most part, it is our observations and personal opinion.

**There are 4 general psycho types of market participants:**

1. Whales – they create market movement;
2. Bulls – funds and legal entities managing depositors' money;
3. Independent traders, and opinion leaders (TA);
4. Hamsters.

#### Whales:

* Choose a promising industry;
* Understand allocation – collaborate with large players, negotiate and buy from hamsters;
* Until they gain a large share of the asset, the market will not go up;
* During the consolidation stage, they create a negative background, so it is difficult psychologically for the rest of the traders to buy. 
* Release news/info, and push TA, so that traders who work based on the analysis come in;
* Big players provoke emotions in their favour;
* If a big player gains a position, he can go at x10 (no counter offers) to the level of breakthrough of the global trend, so that everyone starts buying;
* Raise prices fast and roll out positive news. 

{% hint style="info" %}
If FUD is flowing and there is accumulation on the asset, then it can be evaluated as a strategy for reversal. When following Whales, don't place take-profits.
{% endhint %}

The market is evolving, and the whale game doesn't always work out because there are more and more big players.

#### Funds and legal entities managing depositors' money: 

* Whales can survive a dip, and liquidity is an issue for them: they can buy at 4, then at 1, knowing that they will sell at 20;
* Funds can't go negative; there are reports -> hamsters will take the money.
* Whale knows what positions the funds will quit -> dump with hold and with deprivation of funds to develop;
* The whole fight is for liquidity. As long as someone is in position, the whale won't pull up.

{% hint style="info" %}
If there is an accumulation of a position and news comes out about the fund's exit from the position, it is a sign towards further growth of the asset. Sometimes funds quit on the pump – it looks like the whale gives an opportunity to sell, to exit.
{% endhint %}

#### Independent traders and opinion leaders (TA):

* Run channels, and create liquidity;
* Any whale is trying to align their actions with TA. Pumps and dumps are " designed" for TA to show movement for traders to make things work;
*  The big player lets traders trade on TA so that they gain their 5% liquidity.

#### Hamsters:

* Apathy during the fall, euphoria during the rise;
* Those who pay for other's profits. Everyone makes money off the hamsters;
* Playing against common expectations.

**Now, what kind of investor are you? Can you beat the market from your position?**


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