Overtrading;Usually, when a market reaches an all time high, everyone is scared of the aftermath. This is because a mighty clash is inevitable. People sell their invested stocks in a panic when the market shows signs of failure because they do not want to lose their money.
Demand and supply dynamics; People tend to by what others are buying and they follow trends. A decline in buying of stocks may cause a huge stock market crash and this is why the media could have such a huge effect on the stock market. When people buy or sell stocks in a panic, there is bound to be consequences in the near future. This is because the market will struggle to find balance in its own way.
Too much borrowing and lending;In an attempt to invest in large quantities, people over borrowed from the banks in the 1920s. When the stock market crashed, this money was never to be recovered and the banks lost huge amounts of it. This was a huge blow to the economy. Too much lending in part led to people over purchasing stocks, which was what really caused the stock market crash. The amount of risk taken overweighed the benefits to be accrued from the markets and people were relying in a pipe dream.