Today I came across some cool things on Twitter that needs sharing. This is a special year for crypto, quite many of us are into trading and a lot are new. This is not an easy task, far from it. You can get rich but you can get hurt as well, lose everything in a split second. One wrong move and you're history. In my opinion you can never know too much and there's always room for improvement.
Dumb Money Trades On Emotions
I think it describes perfectly how we think in certain situations, especially those who are FOMO-ing and can be influenced by hypes and make decisions hastily, not based on fundamentals. It's easy to get carried away, too bad everything has a price.
Without pointing the finger towards anyone, I can't stop thinking of those who bought
STEEMHIVE at $8 a few years back, when it looked like STEMM is going to be the second Bitcoin. Then things took an ugly turn and all those nice dreams got shattered and quite many users got burnt.
Smart Money Has A Plan
SecretsOfCrypto says this is the right behavior, this is what a smart trader should do.
Not long ago I saw a post about a plan regarding BTC. The poster said the plan is to sell some (take profit) in July, then again in August and September. I'm not sure why the poster used months instead of market price. It could have been because they like to play close to the west and decided not to reveal much, which I can understand. Otherwise it looks strange as no one knows where the market goes. There are analysis based on which you make a rational decision, but let's not forget the market can be influenced by different factors, like it happened not long ago, when BTC took quite a hit due to the Chinese power cut and Biden's announcement. Anyway, better trust the numbers.
Which One Are You?
I'm sharing these because I strongly believe it can help. Unless you're a very experienced trader with years of experience (good and bad), we can all learn something from it.
Controlling your emotions is not easy but it is a must in this business.
I can see myself in the first situation, although I've never made that mistake. I have been close to it, but has never happened and I'd like to keep it that way. The second is more like me.
There are a few golden rules that can help you avoid big losses, among which I'd like to mention these:
- buy the retrace, buy the red,
- take profits,
- don't be too greedy,
- don't advice based on price,
- advice based on fundamentals,
- sell the green.
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