The market is not driven by individuals but is dominated by emotions: how trading psychology determines price movement.

Many people believe that the fluctuation of market prices comes from a key person or event:

A certain politician's speech, the movements of the exchange founder, changes in macro policies, ETF news, institutional fund inflows and outflows…

But the fact is —

Prices are never directly driven by these factors.

There is always only one variable that truly drives the market:

The collective psychology of traders.

The market is not driven by individuals, but dominated by emotions: how trading psychology determines price fluctuations image 0

1. Why do we always want to “find someone to be responsible”?

After each significant Fluctuation, the market is eager to find the “reason”:

is a certain political figure

is a certain country

is institutions, funds, exchanges

It is breaking news or policy direction.

The essence of doing this is not to understand the market, but to alleviate the anxiety brought by uncertainty.

When chaos is interpreted as “caused by someone”, the human brain generates a false sense of security:

At least this matter is understandable and controllable.

But the market has never been a simple causal system.

It does not “obey any individual” and does not operate on a single logic.

The market is not driven by individuals, but dominated by emotions: how trading psychology determines price fluctuations image 1

Secondly, the market does not react to the event itself.

What the market truly reflects is not the events, but rather:

The change in people's emotions after the event.

The news is just a trigger.

Emotions are the fuel.

When prices rise, most people feel uneasy and are afraid to enter the market;

When prices fall, most people are afraid to continue holding and eager to escape.

This is exactly the most classic and counterintuitive paradox in market cycles.

Third, the market is essentially a “collective nervous system”.

If viewed abstractly, the market resembles a vast neural network made up of countless participants, driven by two primal impulses:

Fear of Missing Out (FOMO): The fear of missing opportunities

Fear of Missing Out (FOLO): Fear of having nothing

Almost all price fluctuations are the alternating amplification of these two emotions at different stages.

The rest of the information, opinions, and analysis are mostly just noise.

The market is not driven by individuals, but dominated by emotions: how trading psychology determines price fluctuations image 2

4. Why do most people always buy at the top and sell at the bottom?

In an uptrend:

The brain interprets “rise” as safe.

Risk is underestimated

People are more willing to buy at high positions.

In a downtrend market:

The brain interprets “decline” as a threat.

Risk is overestimated

People sell at the worst possible times.

This is why most traders repeatedly make the same mistakes, believing every time that:

This time is different.

5. The behavior of retail investors and “smart money” is never in sync.

You will notice a long-standing pattern when observing the market:

Retail investors: enter the market when confidence is at its highest and exit when pain is at its deepest.

Smart Money: Build positions in panic and exit in euphoria

These two types of behaviors almost never occur at the same time.

It is precisely this time difference that constitutes a stable source of profit in the market.

The market is not driven by individuals, but dominated by emotions: how trading psychology determines price fluctuations image 3

6. The truly effective “indicator” is public sentiment.

If you want to gain an advantage, you might as well observe from the other side:

When everyone is talking about the “certain upward trend”

When the market is filled with confidence, optimism, and certainty narratives

This often means:

Risks are accumulating, a top is forming.

And when the market is quiet, desperate, and no one is discussing the future,

On the contrary, it is a stage where the risks have been fully released.

7. Overly trusting your own judgment is, in itself, a trap.

Another common misconception is:

Constantly seeking “proof of correctness” for one's position.

Once you start focusing only on information that supports your viewpoint, you have entered a dangerous area.

Mature traders do not seek “truth” but look for:

The imbalance between emotions and positions.

Profits often arise in places where the majority have not yet reached a consensus.

8. Do not predict every step, but understand the stage you are in.

The market is not made up of countless independent events,

but rather operate within emotional cycles.

The more important question than predicting the next message is:

Are most people now in fear or in excitement?

Understanding this puts you ahead of those who chase news and predictions.

Because emotions always precede events.

Nine, learn to distinguish between “noise” and “signal”.

Noise: social media, emotional opinions, short-term predictions, group chat panic

Signal: Liquidity Fluctuation, Large Capital Positions, Price Action Itself

When you learn to ignore the noise and only observe the signal,

You will start to view the market from a perspective closer to that of institutions.

10. The market is not a game of knowledge, but a game of patience.

The market does not reward the person who reacts the fastest,

But rather reward those who can wait the most.

Do not look for the “perfect entry point.”

And to seek psychological advantages.

While others chase the news, you focus on the emotions;

When others are eager to act, you choose to wait.

Conclusion:

The market is never driven by a single person, a piece of news, or an event.

It is a collective psychological system driven by alternating fear and greed.

The reason most people fail is not due to a lack of information, but rather excessive emotional involvement.

But those who truly make stable profits understand not “what will happen in the market,”

Instead, it is about what emotions people make mistakes under.

When you stop chasing explanations and start observing the mind,

The market will no longer be chaos for you, but repetition. **$SOL **$ADA