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Psychology

Reward Prediction Error

Wolfram Schultz's dopamine mechanic (1997): midbrain dopamine neurons fire most strongly to unpredicted rewards. A vertical green candle triggers the same anticipatory signal as a slot machine paying out — the dopamine fires before rational analysis can engage.

See also
Psychology Green-Candle Pull The visceral attraction to a vertical real-time price move. Dopamine neurons fire to the prediction of a reward (Schultz, 1997), not the reward itself — the green candle triggers an anticipatory signal identical to a slot machine paying out unexpectedly. Activates before any rational analysis can occur. → Psychology Speed Trap The compressed decision window in memecoin trading that disables System 2 deliberation. Pump.fun bonding curves can graduate in minutes. Platforms compete on execution speed as a marketing feature. The faster the rail, the less deliberative capacity the trader gets before the buy fires. → Psychology Five-Minute Rule A forced pause between wanting to make a trade and making it. In the interval, the dopamine peak passes, System 2 deliberation re-engages, and the chart often reveals whether the move was real or manufactured. Disproportionately filters bad setups because bad setups rely on sub-5-minute urgency to defeat analysis. →
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