Why Markets Correct

Markets move up because market participants believe in the fundamentals behind the market. At a certain point it is seen that the fundamentals change and the market corrects, however the reason fundamentals change is not because of some external event, but because of the participants themselves. In other words, an excess of bullishness creates bearishness; it is the participation itself in the market that creates the shift and thus the correction or bear market.

To understand this phenomenon, we must first look at how commodity cycles occur.

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and learn to sit on your hands; for example, how do I quit chasing a stock etc?

I remember someone asking me once, how on earth do you remain detached from your emotions when it is emotions that cause you to want to become a trader anyway? In actual fact it’s more like; emotions cause you to want to find financial freedom, but it means the same thing.

I agree, emotions do play a huge role and it’s even more pointless if you set out to achieve a financial goal in trading, so that you could enjoy a lifestyle goal, such as going on a cruise, only to not enjoy the cruise! All that work for nothing.

But let’s get serious.

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