...arguably bear market rallies can be more damaging than a crash, especially those that hoodwink market participants into believing the end of the bear and a possible start of a sustained bull. Simply because when people lose their guard and believing it is the bottom, they could plough all in , hoping for a repeat of post-March 2020, and for a while it felt good and they go buying more at higher prices, then the collapse comes. While in a crash environment, we would be more on our guard and not get emboldened to enter or we may pull out or reduce in time and stay out of harm's way. A 10% loss on a $1m is worse than a 30% loss on $200k , and with the former its not scary enough to cause people to hit exit , the next 1-2 days could bring another 5-10% falls and even more if they had bought more while with the latter, people get spooked and the damage limited to the 30%.
...traders can get lucky timing their ins and outs, but given that the only thing consistent about this market is its inconsistency, I'd say that in the longer run, traders would get caught at some point (and that's for bulls as well as bears).
