It is a simple reason, there are smarter and more sophisticated investors that have the resources, money and technology, to know what the average investor (you and me) is thinking and will do and knows how to make (take) money from us.
They are smarter and they will almost always win. They have the money to move the market where they want. You can't beat them, they know yours and the markets psychology very well.
Maybe, but my bet is actually it's related to a panic reaction. You buy when it's on it's way up because you are panicing that you will miss out and you sell on the way down because you are panicing that you will get caught in a major loss (you've already held into a loss hoping it will turn back up). Both are actually very natural emotional responses to the circumstances but logically, if something has gone up a lot, then it doesn't have far to go before it stalls, and if something has fallen a lot, it has more potential to rise.