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.

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.

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.

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.

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?