David Mirza

Understanding market sentiment can be one of the most effective tools for identifying potential entry and exit points. Price action alone rarely tells the full story; how participants feel about the market often provides clearer signals.
When optimism becomes extreme—investors loudly calling for higher prices and aggressively defending positions entered after an asset has already surged for weeks—it is often a sign that upside momentum is becoming crowded. In such conditions, taking profits or acknowledging a missed opportunity can be the more disciplined choice.
Conversely, when interest fades and frustration dominates—particularly among holders who bought after extended periods of gains—markets may be approaching more reasonable valuations. These moments of neglect and pessimism frequently present better risk-reward opportunities.
A common reason many investors underperform is the need for price confirmation to gain confidence. They enter after sustained rallies, while early participants who bought during periods of disinterest begin to distribute their positions.
Perfect timing is unrealistic. No one consistently buys the exact bottom or sells the precise top. A more practical approach is to accumulate during periods of fear, when prices are depressed, and reduce exposure during periods of excessive greed, when prices are elevated.