05/16/2025
Key Points
Optimism, greed, fear, and panic—rooted in neurological processes—shape market sentiment and are directly linked to upward and downward trends.
Psychological traits such as FOMO (fear of missing out), loss aversion, and cognitive dissonance often drive traders and investors to make irrational decisions.
Social media platforms can further amplify emotional swings, while mirror neurons contribute to collective behavior, herd mentality, and speculative trading.