Psychological factors influence market movements from "summary" of Charting and Technical Analysis by Fred McAllen
Market movements are not solely driven by facts and figures. In fact, a significant portion of market movements can be attributed to the psychological factors that influence investors' decisions. These psychological factors can include emotions such as fear, greed, and anxiety, as well as cognitive biases that affect how individuals perceive information and make decisions. One key psychological factor that influences market movements is herd mentality. This is the phenomenon where individuals tend to follow the actions of the majority, even if it goes against their own beliefs or analysis. When a large number of investors start buying or selling a particular asset, it can create a snowball effect that leads to significant price m...
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