Markets cycle through predictable emotional phases. Smart money buys at the bottom of fear; retail arrives at the peak of greed. Understanding where you are in this cycle is one of the most important skills in trading psychology.
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Cognitive Biases
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Behavioral
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Cognitive
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Emotional
Cognitive biases are systematic errors in thinking that affect every trader. They're hardwired into human psychology — evolved for survival, not for trading. Recognizing them is the first step to managing them.
The Emotional Cycle of a Market
Price cycles and emotional cycles are inextricably linked. The 14-stage Wall Street Cheat Sheet maps the emotional journey from the bottom of disbelief through euphoria and back to depression. Each stage has a characteristic investor behavior — learning to identify them in yourself is the core skill.