All markets are largely subject to human factor. Thus, merely based on technical literacy and human intelligence are not enough for executing efficient trading results. Unusually, some of the human factors might be a correlation between specific stocks activity patterns and sensitivity to stock market bubbles, trends and crashes. But can smart outclass these factors? 

Smart but why aren't, you are rich?

If somebody claims they're smart, why aren't they rich? Emotional patterns obviously emerged among high earners and low earners. Exactly before the bubble peaked, minorities sells, but the majorities bought more aggressively.

Episodes of extreme market volatility demonstrate the role of emotions based on ever moving stock prices. Unless you can control core fundamental value, it's notoriously difficult to identify any stock bubbles and crashes. Until then, everyone can pretend they're smart.

The basis of buying and selling decisions.

It's important to know how, when and why people make decisions on buying and selling. Therefore, it is important to understand some information and background of the trader and their motives. What prompts people to invest in the marketplace?

In general, most are motivated by money, and invest in those securities that each individual will anticipate will produce the highest return over a given time. People place bets when they believe their potential profits will outweigh potential losses. But it doesn't end here, there are at least two types of people. High and low earners. 

​High earner and low earner emotion and expectation.  

There are a variety of trader's style exists and it turns out that different personality, will pursue different types of rewards in different environments. I guess, everyone who are in the high earners category are better in analysing and able to diagnose their own personal characteristics and emotional control. The gut feeling the high earner had, it was all in their mind. Their balanced mental capacity. 

At the same, a lower earner is more likely to jump at a potential opportunity without gathering enough background information and does not practice a balanced perspective on risk, uncertainty and often in the chronic depressed mood and over arousal contributing to make a lower rate of successful decision.

​Financial market is dangerous without emotional balancing and mental preparation.  

It is the emotional balancing act between the temptation of profit and fear of loss that makes investing is a dangerous game for many people. Most people's action is influenced by hope, optimism, greed and false believe created by the unknown uncertainty. In a game of uncertainty, investing never sounded comfortable.

Experienced traders often command good knowledge of trading methods, the history of up and down, market environment and economic elements. Emotional and mental preparation is important to identify opportunities. 

Long term or short term, value or growth assets.

Long term or short term investment, value or growth investing, it has to be exercised with some precautions, because stock investment is considered an exchange of risk and reward situation by buying underpriced assets and selling overpriced ones. They are always an estimate until when transaction sets in. 

Market moves does not always mean a crucial change in the economic and growth, a business cycle last longer than the stock market cycle and it's not fully correlated. It's all close to ones personal challenge of economic curiosity. 

Even very brilliant and learned people can make big mistakes as they leave some emotion to take control and change their appreciation of realities. This does not imply we need it's abandon one's goal, but it's important not to be a slave to excessive irrational emotional response.

Will human emotions overtake common--sense? I am hopeful that it will not.