Psychology
BTC "Psychology of a Market Cycle" -- Don't be bullish too quickThe daily chart of BTCUSD looks almost identical to the well-known "Psychology of a Market Cycle" graph. This graph shows the steps from optimism to thrill to Euphoria, and then the drop back to anxiety, denial, panic. This chart aligns almost perfectly with the BTC daily chart. As people are anxious, they are forcing themselves to believe that we will recover, only while the chart says otherwise.
fasten your seatbelts !!Hi Folks,
My first idea and analysis on BTC.
Big moments coming up. First things first. This whole social media is bragging about and on Bitcoin trying to talk it in bearish mode.
I personally don't care about social media. My advice ignore it and follow your own perception and vision.
All those people ' expecting' well dude you cannot expect anything in trading.
What I see in the overall picture is a mini descending triangle. And again more often than not (statistically proven) a descending triangle ' breaks' downwards.
But still there is a possibility for this not happening. KEEP YOUR EYES OPEN.
My trend indicators that HELP me and are not definite tell me to fasten my seatbelt.
The 20 day MA moves above the 5 day MA. I have gone back in time and checked the chart and this is not a very positive signal. (signal received)
RSI --> I see a bullish divergence. The value in my rsi makes higher highs while the price Is declining (interesting)
ADX = 50 --> shows me ' a' trend
DMI + = 8 far below I want to see
DMI - = 23.5
There are some conflicts now.
Than I look at the bars what they tell me and I see a strong conflict between bears and bulls. A little indecision about which direction to take.
What can we do.. put you stop loss in in case of...
I wait patiently for my confirmations to be confirmed.
Have a good day all..
Like a comment if you like and for more refreshing idea's you can follow me..
ETH/USD under pressure. We are done waiting. Trade now!As we see in current graph ETH/USDT Perp. we have very clear look on this situation. Ethereum is under pressure so we can scalp it with Long for a short time, or let it fall and Short it!
Lower time frame will give us result. Easy...
Bitcoin crypto psychologieCrypto and investing is all about psychologie. It is simple. You want to get rich or want to be the best, try it. No one prepares anyone for crypto most just choose to invest. Here comes the problem into play. We have to many wanna be people that bought bitcoin. We need fever people in the market. You are saying hey it is right, we dont need the little people, with few money, we got the institutions, well forgot about that, they are buying otc. Of Market!!! But what is needed then you may ask yourself.
Think like someone who is the game maker not a player, you want to controll everything and get the most profit.
Fool the people gtell them they need to sell, show them !!! Let em sell and when no one believes in it let the price skyrocket, so after the low to probable 25-28k, lift it up to 70-90k then again drop it to some lower levels, so people sell cause of the fear they will feel in this moment, espacially this people are the ones that look up the chart first, every second in between in spend on coinbase or tradingview. When they get their notifiation that 30 is hit(I strongly believe we cant fall under 30k) but if they get the notification they might sell. And this time they will be left behind. The next thing they will see is 70k at least. Then a drop to 40-70 k depends on how much we rise. Without much time for panic for the long term holder. Then the final sqeeze to 200k at least, at this point I would sell all alts and eth. To 80% only reason is we dont know how far it can go!
U can sell btc but there is no real need for that. So relax chill and take this not as a guide or investing guru stuff, but as a lesson.
ETHBTC Forecast based on Cycle HistoryI charted this on 20 May and had not looked at it since.
What I wanted to know was should I be holding more BTC, or more ETH? What will grow more according to the charts regardless of my opinion of their fundamentals or adoption ?
If the charts are a representation of the psychology of the masses, then psychology tells us : the best prediction for future behavior is past behavior.
Thus, I'm a big believer price action rhyming with previous BTC halving cycles.
You've probably heard chartists say "history rhymes but never repeats"
While I am aware that ETH was just getting started in the markets peak in 2017/2018... and it will likely far outperform BTC, I have charted a conservative forecast mimicking the previous cycle.
I've pointed out the previous ATH of BTC and ETH as well as where I think we can expect them in the months to come.
The past 2 seem to have been on track in a general sense.
Let me know your thoughts
DRNA; A Psychological Analysis of Investor BaseDISCLAIMER
This is in no way, shape or form, fluid and function, an analytical, qualitative or intelligent compte rendu. There is absolutely no financial advice here because the only financial advice I can give is to research, research, and research. The purpose of this analysis is to serve as an example of an investigation into a company's background, fundamentals, and assets through various lenses to determine if it is a good potential investment for you. The function of this write up is to serve as an educational resource for investors looking to understand how to find good investments. So read and learn some things about a company's investor base, that may or may not be completely bs. This is not meant to serve as financial advice, rather as a case study for analyzing a stocks investor base. I have no clue where the price will go, just where various populations think it is going. I am a fan of RNAi companies, and if I find one that I can cover without breaking a NDA, I will write it up. If you have any further questions, please feel free to ask! Everything is pretty much on the chart. Thanks, hope y'all find something interesting and new!
Emotional Analysis I have posted recently on Wyckoff, Elliott cycled, Gann education and covered psychology.
The Thing is - as a long time trader, you often see new comers and the assumption is more indicators, more stuff = better results. Take a step back and view this from 30,000 feet. You looking at finding an edge, an edge can be as simple as risk management and positioning yourself with a great risk to reward system.
The problem is, if there was an algo or one indicator that could make you rich. The world would quickly run out of doctors and postmen.
What Elliott, W.D.Gann, Wyckoff, Dow and others clearly understood - was not the technical count on the chart, or if this is a UTAD or a spring event. What they appreciated was human nature - psychology.
I wrote this post to show how the mindset fits into the chart - When everyone started posting the "Wall Street, cheat sheet" and asking - Where are we? I would respond, depending on where you bought or sold. It's not a group thing. Unless you refer to sentiment - which is another topic again.
The issue is - everyone is looking to have their hand held. Indicators can be useful of course. But you cannot depend, rely or only take buy and sell signals.
Make yourself sheep and the wolves will eat you.
Benjamin Franklin
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So whilst people assume The Elliott's and the Gann's where the titans of technical. There's a deeper skill they tapped into. Emotional analysis. When studying Elliott, you can walk through a certain journey of why the price moves up & pulls back. Why it rapidly grows in wave 3 and why the 4th becomes messy. Elliott knew what drove these moves & how the retail traders follow on like sheep.
click link for full article
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Wyckoff and Dow - this is not a lesson on the technical side. It's an eye opener.
Wyckoff could make a schematic of the logic and emotions inside the chart and simply plotted it. Dow, simplified it into 6 market tenets. But either way they knew more about the market psychology than they did the chart.
If you are looking to trade alt coins - you need to understand the project, the team & just like investing in a stock. Get a feel for the company.
This last week, I have seen social media posts about "this guy lost this, that or the other" All blaming and pointing fingers at Musk - the truth is if you need to follow a celebrity for stock picking. Chose another sport. Doctors, lawyers, accountants and many professions take many years just to qualify - why is crypto trading any different?
Professional traders know this - and currently it's like having penguins in the water for the first time, the pro's are the sharks.
PSYCHOLOGY This is all it boils down to.
We assume big brother is watching, we assume stocks, crypto etc all being manipulated. There's often talk about FOMO & FUD. Wyckoff knew this as the "Composite man"
Truth is - retail do it to themselves 90% of the time, trying to catch tops and bottoms. Not learning market phases or cycles and then blaming everyone else for their mistakes. Everyone wants to strike it rich, one trade and millions. Seems to be the mentality. It needs time & proper risk management.
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If you can take a step back and see the market with "emotional vision" switched on, you will see why Elliott & Wyckoff are applicable today - Humans don't change, the psychology and mindset is still the same. Market manipulation is strong and real - it's just not what you think.
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
Upcoming scenario on XRPExpecting a normal retracement to the upside with solid resistance levels around the 61 and 78 fib (at these levels I will be taking some holdings out of the market). This will line up with a move to the upside on the BTC chart. after this retracement to the upside has been fulfilled, there will likely be a major market crash bringing XRP to around 20 cents (where I will buy back in).
The move up will trick people into believing there is a recovery pump, and get them on board for longs. However, this pumps will happen so big players can close the remaining of their positions, squeeze the max amount of money out of retail before fully dumping on them and crashing the whole market to buy back in extremely cheap.
Do whatever you wish with this insight, just advising everyone to be smart about it!
BTC Long after Pull back into probability zoneLooking Left. The Pink Oval highlights the constriction phase. as well as the liquidity grabs on both sides.
From the most previous constriction on the hourly. We are above the MR. Which means price will be looking to go short in the immediate next interval but with structure that is predisposed to rise higher based on market sentiment.
fib extension 6.18 will most likely act as a high probability area for large money to enter the market as liquidity of the expanding price action is happing on higher time frames.
Wait for confirmation of entry lower.
but BTC carries the sentiment. Would be looking for alts to follow a similar mark up today.
Do your DD
Videos WILL BE resuming soon. Sorting out some back end stuff for youtube.
Thanks
Most simple strategyIf you don't have to much time or you want to keep your charts simple, or maybe you are just lazy. This strategy is right for you !
What is it ? Is it magic ? No... Round numbers .
Imagine you are going to buy a car. You go to website and look for used cars... What is your price limit ? It is always 5000USD, 10 000EUR or 2500GBP. You dont set your price limit to 4786EUR or 13 334USD. It is the same in trading and investing.
Round numbers are psychological support/resistance levels . For example, if ETH/USD is going upwards and reaches 2000USD, you will notice strong bearish reactions, because a lot of traders believe that the currency pair cannot go any higher than that, so they sell in fear of losing their profits.
Traders can use the round numbers as a strategy. Psychological levels are 00, 25, 50 and 75. In order to use the numbers, you need to go short when market goes up and one of these levels is reached. Also at these price levels you can expect institutional buy/sell orders, SL's and TP's.
You can also use it in forex, stocks or indeces... Watch how 1.40(GBP/USD) works. Or 1.20 (EUR/USD)
Try to play with your charts and be creative... Do not hesitate to add moving averages, fibo levels or candlestick patterns :)
And as I always say: there is beauty in simplicity ;)
XRP/USD Trend. Triangle 202% 9X True/False.The trend is pretty strong. In this upward trend, an almost perfect symmetrical triangle has formed. Notice how ugly the triangle was drawn at the beginning of the trend. Consider why this is so. 316, triangle with base 200%. Rational entry if you are a breakout or pullback trader after breaking the resistance of this triangle. If there is a strong pullback (unlikely), then from the uptrend line.
A complete development of this formation (triangle) will lead to a breakdown of the resistance of historical highs (yellow level). Perhaps he will achieve his "name".
A rollback, if possible, to the uptrend line (optional), which is not critical, but, on the contrary, a rebound from it will give even more confidence to buyers and holders in the right choice and that historical highs will be overcome. ...
After the pumping of illiquid crypto garbage and several top liquid turtles BTC ETH LTC (BNB is an exception) in the near future, it is very likely that the turn will come before the pumping of liquid cryptocurrencies which "swing like illiquid assets" - using the "stick" method. In the "greenest month for green events", two of them are likely to be pumped up with a "stick by the method of the electronic god EGOD".
I believe in "official, professional" liars.
True lie, I want to be like everyone else, blind, I don't want to stand out from the crowd
Remember when they launched the market (the entire cryptocurrency market), when they "raised XRP from their knees" after the effect of an outright false fairy tale of a terrible SEC. At an XRP price of $ 0.24 -0.26, you were almost "shouted" in the open:
"Buy and regardless of any actions with the price on the chart - do not sell if you are not a trader! Send to your wallet and forget"
Did you listen to this ???? They even told you the day openly when the pumping will start. Did you believe ??? I'm sure not.
Greed is evil.
Now 4.4 months have passed. The price is now $ 1.55, it was almost $ 2 That's 9X! Is this comparable to the bitcoin profit over this period? This is not enough for you ??? They give you money, why don't you take it? Maybe because at the moment of not understanding the work you want even more ?? Remember, everyone who is never enough will be reset in the moment.
Greed and non-gratitude must be suppressed so that everyone appreciates what was and what is left. It is only when a person loses everything that he begins to appreciate past comforts and opportunities that he has not used before. This is the only way to turn on the brain of fools.
Another question. Faith in liars.
Why the hell are you reading crazy FUD news in a couple of lines for the real fools in the cryptocurrency market ?? In the end, this is just an outright lie. Their task is to deceive you and send you on the "wrong trail". It is important for them that you become easily manipulated fools.
Why do you support and disseminate this? Why do you take fantasies and manipulative "news in three lines" (so as not to scare the text) as the truth?
Such content creators are the culprits of your misunderstanding of the market and, as a result, the zeroing of your deposit. Can't you figure it out from the rudimentary history of their "news" and price charts?
Their task is only one - to mislead YOU and THAT YOU LOST MONEY on the MARKET !!!
You are walking on a paradox.
When you are sweetly deceived by the "official news channels" with beautiful pictures (absolutely all lies and "water") - YOU BELIEVE.
When you are openly told the truth and confirmed by real actions - DO NOT BELIEVE.
MAY BE ALL THE PROBLEM IN YOURSELF ????
Don't fight the WORM, Ride ITWe act upon the stories we tell ourselves in our heads.
Make sure the stories you have are aligned with the market reality.
So here is another story, the market trend is like the WORM from the movie DUNE, when it comes, you don't stand in its way, you let it pass you and then you jump on its back, holding on with your hooks.
LETTING IT take you to your destination.
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We SEE the worm
We UNDERSTAND the worm
We TOUCH the worm
We ARE the WORM
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Epistemology of Technical AnalysisHow does the reliability of technical analysis relate to our understanding of it as a total population?
Epistemology is a branch of philosophy that examines the nature of knowledge -- its presuppositions and foundations, and its extent and validity. The word epistemology is derived from the ancient Greek epistēmē, meaning "knowledge", and the suffix -logia, meaning "logical discourse." Epistemologists study the nature, origin, and scope of knowledge. Simply stated, epistemology is "meaning-making."
Epistemology presupposes metaphysics. People tend to think of psychology as being the foundation for technical analysis , often without realizing that psychology arises out of, or is a subset of, philosophy. In other words, psychology is "a posteriori" to philosophy. Historically, psychology arose in order to include the empirical method when examining the metaphysical questions posed by philosophy. It has since brought various topics of study to the field of psychology, such as sensation, perception, intelligence, and memory.
At first glance, the relationship between philosophy and psychology seems to have a dualistic nature, and is reciprocal: Modern-day science believes that the "phyisical" (psychology) -- a brain -- creates the metaphyisical, and that the metaphysical (philosophy) -- a thought -- allows us to understand the physical. Phillosophers argue, however, that "no account of knowledge can proceed without assuming that we already have some sample or example of it, or of the way the world works;" If we already know something, then we already have some insight into reality. Similarly, no account of trading analytics can proceed successfully, according to presupposed rules, without some concensus to those rules.
My definition of technical analysis: A concensual set of rules for how to react to market stimuli. We can call TA a language, and it has rules akin to any other language. When we communicate through language, we operate by utilizing a concensual set of rules by which to respond to vocal stimuli. If two people try to communicate an idea to each other via divergent languages, the efficacy of communication is vastly diminished; consequently, if the market is being influenced by people who both DO know and DO NOT know technical analysis, the reliablity of our predictions for market trends is also vastly diminished.
I would argue that the implications of this are stronger this market cycle than ever before, due to the exponential rise in new traders unfamiliar with technical analysis , and that this offset in reliability is proportional to the total trading volume they supply to the market. At the same rate, "whales" who hold the largest crypto bags are likely to be the most familiar with TA, or have those working for them who are adept at TA, and therefore have a significant oppositional influence to those people aforementioned. It makes you wonder how many people have given their economic stimuli to the power elite already bankrolling with their COVID-era monopolies.
Stay safe out there. This is the most risky moment in the history of crypto for those of us with very little we can afford to lose.
The Psychology Of Trading, Fine Line Between Success And FailureMost traders experience similar thoughts patterns and emotions on the charts. your psychology and your mind-set represent 70% of your trading performance. So smart thinking and discipline is more important than your strategy. That's why controlling it is what makes you profitable and successful.
Range of emotions that can impact your trading:
1- Doubt:
It comes after some losing trades you start doubting your knowledge and everything you know. Fight that feeling as much as you can trust your judgment and trust yourself.
2- Fear:
Also comes after some losing trades and risking too much. the best way to fight this emotion is that you should be comfortable with what you are risking and if you feel uncomfortable LOWER YOUR LOT SIZE.
3- Revenge:
An emotion that exist since the stone age. after your stop loss is hit you want to take a revenge from the market and get back your money. Well you should not take it personally at all and you should convince yourself that in the market anything can happen.
"Main Tip" WHILE TRADING LEAVE YOUR EMOTIONS AT THE DOOR
Bitcoin vs Gold / Gold's Last Dance / Spot the DifferencesBesides time, that is x10 faster on Bitcoin due to technological advancements, better global access to markets and information i see no other major differences. Our future self 30 years from now when we will be around 60-90 will sound to our kids and grandkids as our grandparents and parents right now, BTC is the safe haven!!!
Matter of fact BTC has a bright future ahead but imo the insane bitcoin rush is now gone, it will slowly and gradually replace gold (as global reserve) but first gold has one last dance.
BTC - Don't Buy the Dip!The problem with wanting to buy the Bitcoin dip lies in knowing where the dip actually is. And in the case of Bitcoin, using conventional logic to determine the latter simply will not do. That is so because the crypto-king continues to epitomize the so-called "animal spirits".
Bitcoin's rally was, and continues to be, driven primarily by greed. Traders can be expected to want to go long at the first possible time for the same reason. Hence, buying/selling discrepancies are likely to be created at every new dip, bolstering the adverse volatility in the market. However, the market is long overdue for a sizable correction, and the BTC may dive below 42k and head towards the psychologically significant support level at 30000.00.
What can be asserted with fair confidence is that the eventual dip would not be followed by a V-Shaped rebound. Rather, the new correction is likely to be concluded with more erratic price fluctuations.
Do not rush to buy in at all costs because there are plenty of reasons to expect a deeper correction. Watch the Fibonacci retracement levels and the moving averages.
Technical Formula for Understanding MARKET PSYCHOLOGYI lost a lot of money in Tehran Stock Exchange. Because simply I arrived too late. I read a lot in past year and now I can say why I lost a lot of money and how can prevent it in future.
It's simply the psychology of the market. Retailers like me get in when everybody says that something is good and profitable; Seriously Everybody!
Tonight I was thinking about a technical formula of analyzing market psychology to find better entries in markets and I came up with this.
There is 4 waves in every market/stock/digital coin/etc.
Wave Zero:
Smart money come here. It happen in things that are very cheap and nobody talks about them. Wealthy investors never buy expensive thing, remember!
On the chart you can se a slight rise in overall volume but price do not show a big rise. It respect the resistance. Price don't break it's prior resistance but the bottom price rises.
You can see higher lows in the chart but no higher high. Smart money controls the price and didn't buy a lot in one week. Because they don't want people get noticed yet. So they keep buying a long period but their positions sizes are low.
After buying 75% of their desired volume, they but the other 25% faster. So you can see a rise in price, higher highs and higher low and finally the breakout happens and first wave starts.
Wave One:
Obvious rise in price and volume but still not everybody knows. News agencies don't talk about it yet. The only group who find out are seasoned traders. They are going to buy in the pullback of this wave. So this wave has the shortest retracement. Because there is not a lot of rise in price and experienced traders have bigger money than retailers.
Wave Two:
This wave has the longest candles and biggest gain. Everybody is happy now and enjoy the profits. At the end of this wave news agencies start to talk about it. Gurus publish some analysis and say that it can go even higher. Slowly retailers getting noticed. But they are not confident about it yet.
Smart money starts to sell about 50% of it's positions. Because retailers don't have a lot of money it takes time for them to buy the pullback so we have a longer retracement than Wave One. Notice, smarter retailers come here and others just come when the Wave Three starts.
Wave Three:
This is Euphoria. People are exaggerating about the stock. They think it worth a lot higher and they think it can go to the moon. Here we see lower volumes than prior waves because in this stage retailers move price higher and they don't have a lot of money. Slowly sells rise. Volume keep rising but the price lose it's momentum and the candles getting short until red candles and dojis show up. BOOM! Smart money and the experienced traders start selling all of their stocks.
From here you can see price getting down and people get nervous. This is the real sign of down trend.
So summary:
How to find out where is smart money?
Go search cheap things in weekly timeframes. Find something that is consolidated and you can see a slight rise in overall volume. Price shows higher lows but no higher high; inside consolidation. It's not a good entry for retailers because price can stays here for months. There is no sound about this stock in market.
How to recognize first wave?
Obvious rise in price and volume. Price broke from a consolidation lately. Nobody noticed it yet; it's very important! Don't look in news and guru groups for good stocks/digital coins/etc because if they know we are not in first wave. A few knows about it and they are hopeful. It's Optimism phase. The last sign is that retracement doesn't last longer than 4-5 weeks. After breakout from top of wave one, buy the pullback to the broken resistance. It's the best entry for retailers.
When to sell?
When news start talking about your stock sell 50%. Highest candles, highest volume, longer pullback, people who have it are joyful and excited and non experts look for opportunities to buy the stock. These are signs of second wave. It's the excitement phase.
After another breakout from top the last wave starts. You can see retailers are super optimist about the stock. No bad News about the stock but you can see decreased volume. You can sell other 50% here. It's the Euphoria.
People who invest in long term can benefit from above explanation.
One last tip: traders who work with Elliott waves, the first wave is the first Elliott wave, the second one is the third Elliott wave and the last wave in my explanation is the fifth wave in Elliott theory.
Tell me if it helped you or you have other ways to recognize market psychology by technical analysis.
Why using automated trading? #1There are a couple of reasons why to use automated trading, like better risk management, human error, easier to diversify, and Psychology
In this post, the focus is on psychology.
Here are some of the cognitive biases that affect trading:
Loss aversion - the tendency to prefer avoiding losses to acquiring equivalent gains. It feels much worse losing $100 than the joy from earning $100.
(A huge topic, the researchers got the Nobel prize for this)
Sunk cost - the tendency to treat money that already has been committed or spent as more valuable than money that may be spent in the future.
In trading, this effect with loss aversion making people not cut their losses. When we enter a trade we know that a loss can happen, if the losses are not cut the rest of the money in the account can be lost too.
The disposition effect - is an anomaly discovered in behavioral finance. It relates to the tendency of investors to sell assets that have increased in value while keeping assets that have dropped in value. Traders tend to lock in gains and ride losses.
Recency bias - a cognitive bias that favors recent events over historic ones, in trading, a streak of losses can demoralize a trader even if he had a good run for a long time.
I don't know of a system that works 100% of the time.
There are more psychological effects, but those are the main ones.
Using automated trading, allows traders to reduce these effects on trading because the stocks are chosen in advance, the risk is defined, the entry and exit are calculated and executed by the algorithm (Unless rare events are happening).
In the past, I was sometimes afraid of entering a good trade or cut my loss quickly, due to these effects and wishful thinking that the price will do what I want.
The Psychological DANGER of Counter-Trend TradingI see many traders consistently trying to fade the trend, but be careful.
In this post, I will explain the psychological problem that can arise from it.
Every time you get something that you want in life or that is pleasurable, you get positive reinforcement,
and your brain says "I want more of that stuff"
and then the brain says: "Keep doing what you are doing" ---> Behavior is learned. (Your neurons in your brain got linked together).
Once the behavior is learned, and the neurons linked, it is very hard (near impossible according to behavioral science) to extinguish this learned behavior! Old habits die hard.
Thus, the trader keeps doing the behavior that over the long run will generate losses. WHY? because reversal points are momentary while trends are prolonged and if the trader is trying to constantly make money out of the market, he continues to do the learned behavior, hoping that "NOW there must be a big correction", even though a correction can be many months in the future.
So now you are probably asking: "ok Mr. Ph.D. in psychology, what is your solution? I already learned the wrong behavior, am I doomed?"
According to science, there is hope, instead of trying to extinguish the behavior, you need to re-write it with the new behavior (replace it with a new behavior).
What does it mean in a trading context?
That means that if you are in the past got burned from counter-trend trading, it is recommended to join the trend --> you will generate profits ---> positive reinforcement ---> newly learned behavior ---> ah-ha moment
Keep Alert CPI reported Lower INTENTIONALLYThis is a risk caused by benefit conflict.
Why gov reports CPI lower than prediction?
(1) hide the fact of inflation
(2) higher CPI => investors ask higher interest rate of bonds => gov pays more interest on debts
(3) higher interest rate of bonds => not good for non-growing stocks => companies collect less money from stock markets but need to release more bonds.
I have bought USD. Should I cut loss?
(1) I guess it is stop hunting. If stop hunting is executed, I consider buy more.
What we can do?
(1) I encourage people expose more evidences show CPI is actually higher than gov claims.
(2) Inflation is different from devaluation of debts. If consumer price becomes cheaper, we have more money to return debts, so cheaperer consumer price can also approaches devaluation of debts.
"Aw, 20 Dollars? I Wanted A Peanut!"Market Psychology simplified
Carrying on the Simsons theme - In the last couple of months, I have written several educational posts & have been lucky enough to see some being selected as "editor picks" After writing some more serious ones, I wanted to write some other posts to have a laugh.
I had some great comments, replies, and requests on the back of the first Bart one. Actually enjoyed the art side of it more than I expected.
Back in February, I posted a post about market psychology.
With feedback from Bart and some requests on psychology, I thought I would write a post using the "Simpsons" to explain the phases. So you have a little daft fun, with a topic worth covering from a technical perspective.
Phase one
Phase one is Hope we hope we are correct in our analysis, we hope that the market goes in our favour, we hope for moon shots and Lambo's. Think of hope and we think of words like aspiration, desire, wish, expectation, ambition & dream. Hope is what we are feeling before a trade is placed.
Phase 2
As a trader, we feel optimistic as the trade goes in our favour, we get excited and dream of the possibilities. What if this goes all the way, what if this account makes me! Bragging rights, money banked - Life doesn't get much better. We can start to relax and unwind and get ourselves into a good place, mentally.
Phase 3
Belief - at this stage, nothing could go wrong... Well, we hope and maybe pray for. Trading, things never really play out to plan. We see crazy swings in our favour and wild pullbacks. (often enough to give us heart attacks) So we listen to chilled music, we talk to ourselves & we say a silent little prayer that this is the one! My analysis was correct, I am quietly optimistic about this trade, Lambo - here we come, just a little further.
Phase Four
Thrill!!! What else is there? At this stage, we are winning in life. Now we are picking the colour of the Lambo. Nothing can hurt us now. In trading terms, this is where life often comes to kick us in the ass! But who cares, we are on top of the world!!!
Bitcoin is going to the moon - I bought at $59,000 it's now at $61k I can't lose...
The fifth phase
Complacency - now back enjoying the beer, we got some great paper gains and we will never see $50k again. Death to Dollar, Rise to Bitcoin and all that! Let's chillout.
Phase 6
As the Pullback comes - we start to get a little anxious, will it go below my entry? What? it can't go there, no way. I am an early adopter, I was in and now it's not continuing up???? What the hellllllllll. I can't sleep, I don't want to eat, I'll just take a triple Espresso with a splash of Red Bull.
The 7th Phase
Denial - This can't be a trend change? It must be an aggressive pullback. Why is it going so low? I don't believe it, I only have 30X leverage on my trade. I'll hold out, it will hit $1 Million a Bitcoin by the end of the week. We hold and hope! Until the leverage gives a margin call...
Phase 8
Panic! Pure PANIC Bitcoin falling through my $56,000 floor. I'm 30x Leveraged, please don't drop, please don't. How will I tell the wife I used the kids as collateral? I have to sell out, I can't take another red candle.
Maybe the little sprite is toying with me!
Phase 9
Why you little.... Yes, Anger sets in. You are out at a healthy loss. It's gone and beat you. Blasted crypto! Must be a scam! I already put a deposit on my pink Lambo. Told the Mrs she could have that diamond ring on Friday. Now what?!>?!
The 10th phase
Watching Bitcoin move on up, beyond 60, up through 70, into the hundreds. You feel depressed. Trading might not be for you, Bitcoin was a scam. The US government played me. Where next? Work on Monday, How do I tell the wife about the diamond? How do I explain to the Lambo dealer I'd like my deposit back. "Doh, it's a deposit. I've last that as well!"
Bitcoin was just an analogy here - these phases happen over and over again. Nothing new, they will repeat themselves over and over again. To visualise this on a chart, you need to go to the psychology post linked below. To go deeper into this, It's worth reading "Trading in the zone".
Hope you liked the images and content!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
