[EDU] Why doesn't Market goes in a straight line? 3 Reasons Why

Hello fellow traders , my regular and new friends!
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1. Market Psychology and Greed/Fear Dynamics

Trader psychology plays a significant role in market movements. As prices rise, greed may drive buying, causing the market to become overbought (likewise when market is down). Eventually, fear sets in as traders worry about a potential reversal. This fear can lead to profit-taking and trigger a pullback. This can happen at previous supply demand zone,pivot points, whole or quarter numbers etc)

2. Profit-taking

- Traders who entered the market early in the trend may decide to take profits as the price moves in their favor. This selling activity can lead to a temporary pullback as these traders exit their positions.

3. Fundamental Factors

- Economic events, geopolitical developments, or changes in market sentiment can trigger profit-taking or reevaluation of positions. Unexpected news or data releases may prompt traders to adjust their positions, resulting in a temporary pullback. (E.g. ECB or FED Speeches, unexpected rate changes not aligned with expectations, outbreak of diseases/wars)


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