This question was sent to me from one of our students: Hey Joe! I was really a successful trader during the late 1990s. I now canât trade my way out of a paper bag. What happened? Bull markets are not driven by fear and greed, as some would have you think. Rather, they are driven by showiness. When prices continue to rise, traders begin to feel euphoric - they feel increasingly excited and think the uptrend will never end. That is okay if what they believe is part and parcel with a larger overall plan that looks at actual price data and takes into consideration that reality indicates that an end to the uptrend will eventually come. The plan has to deal with that reality. The trader cannot begin to think that he is invincible, or that it is his own genius that is allowing him to make money in a bull market.
Late 90's market was one of those once-in-a-lifetime circumstances in anything equity related. Hardly anyone was a loser since the tide was so huge and lifted every boat. The reality is that there's always a bull market trend in something, somewhere, at all times. You just neeed to know how/where to look.
No, the untutored mind, projects any price move, up or down, in the same direction. If going up, the mind projects it continuing up. If going down, the mind projects it continuing down. Its as natural as walking. But accurate trading is another matter altogether.
"When prices continue to rise, traders begin to feel euphoric" Not driven by greed? Not sure what that means.... If you're not getting greedy while the market's going up (and you're long), what's there to be euphoric about?