The word emotion, in the dictionary, means an individual's subjective and conscious body thoughts and feelings about external stimuli, which have the characteristics of psychological and some physiological responses. To put it simply, emotion is a person’s response to external stimuli. When we respond to external stimuli, we often take actions. You can feel it yourself. When both emotions and actions appear, who is earlier? Who dominates. Please think deeply about this very key!!!!!!
Because this is critical, let me give you an example.
When you receive external stimuli, you may not act, but you have emotions (such as being criticized by your superiors, angry) and this emotion will last for quite a while, and you will still be in such anger until you go home. Then I went home, tired after a day of work, still in a bad mood, and my wife complained about you again. At this time, you not only got angry (emotional) but also broke out, had a big fight with your wife, and finally started a cold war in extreme anger. Then, your son came home and gave you a test paper with a score of 90 points. Due to the superposition of two emotions And when a quarrel breaks out, the son's score itself is not a big problem, but you start to find fault, your son talks back, your anger reaches its peak, and you beat your son... The most wronged and unlucky one is your son, who wanted to be praised for his excellent results and was beaten up. The son couldn’t figure out why, just like a market trader who was full of hope but finally ushered in a sharp drop. In fact, many people can't figure out why. I think: The market is influenced by news and dominated by emotions. Good or bad news is important, but the emotional superposition reflected by the news is the key to affecting the trend. (This is the point) I can find many such examples in the market, which is obviously good news, but the market rises briefly and finally starts to fall, so no matter how unpredictable the news is, the sentiment is the final result. In the market, emotions are sometimes very slow and small, and sometimes they come violently and come quickly, so there should be layers. Let me give you an example. When the subprime mortgage crisis in the United States improved, the initial stage There are some good data in the market, and some news (such as the unemployment rate, such as retail sales data, such as official speeches) is in the early stage at this time, and the strength is often not strong (it is relatively mild at the beginning), but when there is a good situation, then slowly News and data are released continuously, more and more good news comes out, (the superposition of good sentiments) finally began to reduce the scale of bond purchases and put interest rate hikes on the agenda (a meeting discussion did not start, but the biggest stimulus appeared) This is the market Finally ushered in the biggest stimulus, unilateral start! !
When you understand emotions and look at the market from the perspective of emotions, will you find some characteristics of the market, whether it should rise or not, but it is good but falls slightly, or even suddenly falls sharply. So many times market behavior is the proof of our emotions, so we can definitely feel it, but many people cannot understand the market from this perspective, but I want to tell you that market trends are always emotions, market behavior is the superposition of our emotions, and Behavior must be caused by emotion.
Therefore, when we study the market, we must first study emotions and study ourselves. We often see the old saying that has been passed down for hundreds of years: the market only refers to the weakness of human nature. In fact, it is not that it (the market) knows your weaknesses, but that the market is composed of countless you and me, and your weaknesses are in its hands. So does it mean that the profit and loss in trading depends on the grasp of self-emotions, just like Couples in first love, when she is full of emotions, even if she is wrong, even if she makes trouble for no reason, you must unconditionally comply, comfort, and obey. That's one side of the market.
The market is changing, and its changes are often rational for a while and emotional for a while, because people are like this, so the ultimate goal of our research on the market and self is to find a suitable point under such emotions, and that point brings us What is stable profit. .
The next article will continue to share how to deal with the market's own emotions
My serialized articles are continuous and closely linked. Readers please do not take it out of context, continuous reading will help you understand what I want to express! ! !
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