what is negative feedback 
negative feedback can be defined as a system where outputs mute or moderate the initial inputs with a dampening effect in the context of contrarian investment an investor using a negative feedback strategy would buy stocks when prices decline and sell stocks when prices rise which is the opposite of what most people do negative feedback by this definition helps make markets less volatile by pushing systems towards equilibrium its opposite is positive feedback in which a good outcome is perpetuated or when herd mentality pushes elevated prices ever higher negative feedback is also used colloquially although it is technically incorrect as a system where outputs are routed back as inputs to exacerbate some negative outcome thereby worsening a bad situation such as an economic panic or a deflationary spiral this use is technically incorrect as it is an example of a positive feedback loop that makes a negative outcome worse still many people incorrectly use the term negative feedback loop in this context 