RE: 2nd consequetive sell down23 Jul 2020 09:56
classic risk bias behavior. When investors see a paper loss shrink it has no real effect on behavior, however when they see a large profit that becomes their new baseline and many get very nervous when it shrinks a little. Risk bias is now taught to traders they know that a spike followed by a small retrace will trigger sells where as same finishing price after a slow climb will not. Ergo traders will wait for momentum to subside and then sell a % of their holdings knowing small investors will follow. they then hoover them up at a reduced rate. Its hard wired in us and very hard to train yourself to go against it. Investors who work on fundamentals do not have this problem, amateur traders are practically at its mercy. gla