The interplay of investor fear and greed – often called the twin tyrants of market psychology – becomes especially intense when trade policy shocks hit. In trade-driven markets (equities, commodities, FX, and crypto), sudden tariff announcements or trade-war escalations can trigger primal emotional responses. Fear can send investors fleeing to safe havens (gold, bonds, yen) and prompt panicked sell-offs, while greed can fuel short-lived rallies on rumors of policy relief. In the words of Warren Buffett, a legendary investor, one should “be fearful when others are greedy and…greedy when others are fearful” see.news . Yet in practice, traders often fall prey to biases and groupthink that amplify market moves. Understanding the psychological foundations of fear and greed – and how they play out in different asset markets – is crucial for navigating policy-induced volatility. At its core, market behavior reflects human psychology. Fear tends to dom...
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