can anyone explain the psychology behind noobs selling at exact bottom?

[schizo]

The other thing I think a lot of the TA folks forget is that - at the point where someone sold in a falling market - that there was no "bottom". It was still falling. I see people all the time say "well it was stupid to sell there as it was putting in a bottom". That can only be seen in hindsight after the subsequent rise.

When you're drowning in so much losses, aka Painus Maximus, I can assure you the last thing on your mind is TA.

 

[wxytrader]

yes im new and writing this question to the best of my understanding. if you feel like i should ask a better question then please correct me oh what i should ask about.

what is the main trigger for new traders riding the trend down to the bottom and then exiting all at once right before it turns
or is it their panik selling that turns the trend back up?
it was mentioned in few books and videos but never was broken down in depth

everyone kinda just says. nobs sell at worst time just because they re noobs..
but no technical details about what drives the whole process


i belive i understand why they ride the trend down but im still trying to process why and how it happens that alot of them feel the urge to sell at the same time.

i remember someone mentioned "maximum pain" but what does that mean.
if they all entered at different times so the number and percentage losses are different for each player but their decision to sell happens almost at once.that would mean that the area of maximum pain is dictated by the actual trend regardless of where they entered and how much they lost?

is it certain amount of time passing or lack of green bars or the speed of downtrend ?
i want to know more psychology and mechanics of this specific action. i want to understand that better.
please dont engage in unrelated discussions if you dont know you dont have to answer or derail this post with nonsense just move on to another thread and derail that one...

Same reason why people buy into a hot housing market...yet they will line up for cheap gas to save a few bucks lol.

 

[wxytrader]

But what causes people who entered at different times to sell all at once?
or is it because the new traders cant read the chart and cant tell whether its a downtrend or pullback?

what is realistic as a professional and profitable trader.
I honestly dont even know what is a realistic expectation as a pro when it comes to reading charts.

Do you read responses?

Price action is created by the interaction of individuals in the marketplace. Bottoms are often characterized by capitulation, which by definition occurs when some material portion of asset-holders collectively decide to puke out of their positions - based on newsflow, recent action and other factors. Human psychology is similar from person to person, leading to the phenomenon where many such weak hands reach their uncle points at approximately the same time.

Note that the reverse is also true i.e. weak hands will capitulate into a strongly trending asset at approximately the same time, usually after a large move has occurred and fairly close to the turning point. See for example the ARKK NAV over time, most of the money piled in right at the top. This means that when the tide turns, everyone starts seeing red at the same time and to approximately the same extent.

 

[ironchef]

yes im new and writing this question to the best of my understanding. if you feel like i should ask a better question then please correct me oh what i should ask about.

what is the main trigger for new traders riding the trend down to the bottom and then exiting all at once right before it turns
or is it their panik selling that turns the trend back up?
it was mentioned in few books and videos but never was broken down in depth

everyone kinda just says. nobs sell at worst time just because they re noobs..
but no technical details about what drives the whole process


i belive i understand why they ride the trend down but im still trying to process why and how it happens that alot of them feel the urge to sell at the same time.

i remember someone mentioned "maximum pain" but what does that mean.
if they all entered at different times so the number and percentage losses are different for each player but their decision to sell happens almost at once.that would mean that the area of maximum pain is dictated by the actual trend regardless of where they entered and how much they lost?

is it certain amount of time passing or lack of green bars or the speed of downtrend ?
i want to know more psychology and mechanics of this specific action. i want to understand that better.
please dont engage in unrelated discussions if you dont know you dont have to answer or derail this post with nonsense just move on to another thread and derail that one...

We are social animals, like in a herd, herding instinct.