The Untold Psychology Behind Every Bull Run
When discussing a bull run in the financial market, in most cases, people refer to charts, numbers, and tactics. However, there is something more in every bull run that drives people. That thing is psychology.
A bull run is not only the increase in prices but human emotions increasing with the prices. People become optimistic when there is some indication of growth in the market. There is excitement with hope, and excitement spreads like wild fire. I have experienced the power that the confidence of a single individual can have on other people, particularly in my circle. When one person purchases and begins discussing profits it makes others feel that they should not be left behind.
It is what we refer to as FOMO fear of missing out. It is powerful. Though your heart tells you, wait, that price is too high, emotion tells you, go in now or you will miss the chance. At Nigeria, I have observed that friends and neighbors are quick to make purchases as soon as they become aware of success stories. It is a community spirit though it is not fueled by facts alone but by psychology.
Another untold part is greed. Having begun to earn money, people do not want to quit. Most of them wait until it comes to a little more instead of taking the profit. Meanwhile, new investors keep on coming and believe that the run might never come to an end. This process goes on until fear eventually reclaims its position.
Actually, all bull runs are a ballet of hopefulness, greediness and fear. The direction can be depicted in charts, however, the true impetus is in the mind of people. And when you have known this, you will be able to see that the greatest driver of a bull run is not the market, it is we.