As investors, we often find ourselves falling into the traps of the market. To avoid this situation from happening again, it is crucial to understand the psychology behind market trends. Market cycles typically consist of several key stages, each accompanied by a unique investor psychological state.

In the early stages of a rise, investors often maintain a cautiously optimistic attitude, carefully testing the waters with tentative positions, worried that it might be a false rebound. As the market accelerates upward, investment enthusiasm surges, greed takes over, and many begin to go all in or even leverage their positions.

When the market enters a high-level consolidation phase, investor psychology becomes complex, as they both look forward to continued rises and worry about potential declines, hesitating over whether to cut losses. If the market starts to decline, investors' psychology will undergo a process from denial and wishful thinking to panic and despair; some may choose to average down their positions, while others may decide to sell at a loss.

When the market is at the bottom and consolidating, most investors will feel numb and doubt the market's prospects, choosing to stay on the sidelines. However, as time goes by, hope will be rekindled, and a new cycle may be about to begin.

Mastering these trading psychology principles is crucial for improving the quality of investment decisions. The core lies in staying calm during market panic and restraining greed during market euphoria. Only by achieving this can we remain undefeated in the complex and ever-changing market.

Remember, successful investing requires not only insight into the market but also control over one's own emotions. Through continuous learning and practice, we can gradually improve our investment wisdom and find a balance amid the ups and downs of the market.