Be careful: Markets always do the opposite of what you think

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Many people think that the financial and crypto markets are predictable, because of this, they maintain that projections about what will happen in the future can be made quite accurately. And it is not a mistake to see it that way, because, in fact, it is; but the fact that this is the case should not prevent us from seeing the edges of the matter and being careful.

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The care we must have

I was talking to a friend who is also a trader and it told me the following:
"Frequently, when I find myself trading in the markets, I realize that the problem I have as a trader on many occasions (and that's why I lose trades), is not that I don't know what I have to do, nor is it that I don't know what is most likely to happen, the biggest problem I have and the biggest mistake I make as a trader many times is that I don't do what I know I have to do in a timely manner, I'm victim of inactivity, and in that inactivity, I'm over optimistic or pessimistic, and by the emotions, and because I lose vision, I end up not winning when I should win, or losing more money when I should have cut the losses much earlier".

My trader friend's problem is that it knows exactly that it has a problem, it knows what it is, but it don't know to solve it, even prefeeling the solution. What happens to it? In my opinion, this trader suffers from great indecision and insecurity that leads to discouragement and lack of will and finally to financial losses that it should not have experienced.

Markets are predictable, but they are also unpredictable at the same time

The financial and crypto markets are predictable, in the sense that we know that they always fluctuate up and down, and that when they are not directly in that dynamic it is because they are in lateralized channels, better known as ranges.

But that is where the predictability ends in the behavior of the markets, because knowing the future points that the price of an asset or cryptoactive will reach exactly at each moment is another matter. It is not possible to know exactly and that is where the markets will always be unpredictable.

Recognizing that the markets are unpredictable as well as predictable does not prevent traders from making money with them if we understand that this is part of the logical complexity of the markets. And that the complexity of the markets is due in turn to the complexity and diversity of the components that make it up (that is, of the people who operate them).

Hence, it is very important that we know how to define take profit and stop loss points and properly manage our financial capital.

Beware: Markets always do the opposite of what is expected

Almost always, you have to make conservative projections, because if, as traders, we project that the price will very surely reach a certain point, we can obviously buy, however, in my personal opinion, we should always go below the maximum point of our likely estimate.

This is just my personal opinion, but in my opinion, this is so because we need remember that the markets move by supply and demand, and because we should never try to reach the last possible penny of profit in our trades. I mean, I'm talking about take profit points here.

I have verified what I am telling you from my own experience, but it is logical that other traders may have a different opinion, since trading is as complex and as diverse as people, we exist in the Universe.

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In any case, what I say about the markets always doing the opposite of what is expected is a generalism, since this is not always the case, but it is in most cases, which is why we must always be careful with our trading capital. Because if we prepare ourselves to try to resist the unexpected, we will probably be better able to face the markets and become profitable traders, which is what we all want at the end of the day, right?

Being greedy when others are fearful

And let's always remember the old and well-known trading saying that "be greedy when everyone is fearful and be fearful when everyone is greedy". This is probably the biggest star in trading.

Because it's when everyone is scared in the markets that the biggest opportunities for profit in trading present themselves, but when everyone is greedy that's when the opposite happens, that is, that's when the biggest chances of losing happen. I mean, because of greed people start to enter the market at times of great overbought when the trends are already well advanced and about to culminate and they end up taking losses on their trades.

The market is full of profit opportunities, let's never forget that, but let's also never forget that we must be careful with everything we do in the markets when trading.

What do you think about the topic discussed? Please comment.

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Cuidado: Los Mercados hacen siempre lo contrario de lo que se piensa

Muchas personas piensan que los mercados financieros y criptográficos son predecibles, debido a esto, ellos sostienen que se pueden hacer proyecciones sobre lo que pasará en el futuro de manera bastante acertada. Y no es un error verlo de esa manera, porque, de hecho, así es; pero el hecho de que así sea no debe impedirnos ver las aristas del asunto y tener cuidado.

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El Cuidado que debemos tener

Hablaba yo con un amigo que también es trader y me comentaba lo siguiente:
"Frecuentemente, cuando me encuentro operando en los mercados me doy cuenta de que el problema que tengo como trader en muchas ocasiones (y por el cual pierdo operaciones), no es que yo no sepa qué es lo que tengo que hacer, ni es que no sepa lo que más probablemente pasará; el mayor problema que tengo y el mayor error que cometo como trader en muchas ocasiones es que no hago lo que sé que tengo que hacer de manera oportuna. Me gana la inactividad, y en esa inactividad, me vuelvo optimista o pesimista, y me ganan las emociones, y como pierdo visión, termino dejando de ganar cuando debo ganar, o perdiendo más dinero cuando debía haber cortado las pérdidas con mucha mayor antelación".

El problema de mi amigo trader es que sabe exactamente que tiene un problema, sabe cuál es, pero no se dispone a solucionarlo, aún conociendo la solución. Qué le sucede? A mi modo de ver ese trader sufre de una indecisión e inseguridad muy grande que le lleva a un desánimo y falta de volunta y finalmente, a llegar a pérdidas financieras que no debía haber experimentado.

Los mercados son predecibles, pero también son impredecibles al mismo tiempo

Los mercados financieros y criptográficos son predecibles, en el sentido de que sabemos que fluctúan siempre al alza y a la baja, y que cuando no está directamente en esa dinámica es porque se encuentran en canales lateralizados, mejor conocidos como rangos.
Pero hasta allí termina lo predecible en el comportamiento de los mercados, porque saber los puntos futuros que de manera exacta alcanzará el precio de un activo o criptoactivo a cada momento es harina de otro costal. No es posible saberlo con exactitud y es allí donde los mercados siempre serán impredecibles.

Reconocer que los mercados son impredecibles a la vez que predecibles no impide que los traders ganemos dinero con los mismos si entendemos que esto es parte de la complejidad lógica de los mercados. Y que la complejidad de los mercados se debe a su vez a la complejidad y diversidad de los componentes que le conforman (es decir, de las personas que los operamos).

De allí que es muy importante que sepamos definir puntos de take profit, stop loss y hacer un adecuado manejo de nuestro capital financiero.

Cuidado: Los mercados siempre hacen lo contrario de lo que se espera

Casi siempre, hay que hacer proyecciones conservadoras, porque si, como traders, proyectamos que el precio llegará muy seguramente a un punto determinado, podemos evidentemente entrar en compra, no obstante, en mi opinión personal, siempre debemos ir por debajo del punto máximo de nuestra estimación probable.

Esto es tan solo mi opinión personal, pero a mi modo de ver, esto es así porque recordemos que los mercados se mueven por oferta y demanda, y porque nunca debemos tratar de alcanzar el último centavo probable de ganancia en nuestros trades.

Esto que les digo lo he comprobado por experiencia propia, pero es lógico que otros traders puedan opinar de manera distinta, por cuanto el trading es tan complejo y tan diverso como personas existimos en el Universo.

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En todo caso, lo que digo respecto a que los mercados siempre hacen lo contrario de lo que se espera, es un generalismo, ya que no siempre ocurre así, pero sí en gran parte de los caso, por ello es que siempre debemos ser cuidadosos con nuestro capital de trading. Porque si nos preparamos para tratar de resistir lo inesperado, probablemente estaremos mejor capacitados para hacer frente a los mercados y convertirnos en traders rentables, que es lo que a fin de cuenta queremos todos, o no?

Ser codicioso cuando otros son temerosos

Y siempre recordemos el viejo y conocido dicho de trading que dice "se codicioso cuando todo el mundo es temeroso y se temeroso cuando todo el mundo sea codicioso". Esta es probablemente la máxima estrella en el trading.

Porque es cuando todo el mundo está temeroso en los mercados cuando se presentan las grandes oportunidades de ganancia en el trading, pero cuando todo el mundo está codicioso es cuando ocurre lo opuesto, es decir, es cuando ocurren las mayores posibilidades de pérdidas, porque por avaricia la gente comienza a entrar en el mercado en momentos de gran sobrecompra cuando las tendencias ya están muy avanzadas y a punto de culminar y terminan obteniendo pérdidas con sus trades.

El mercado está lleno de oportunidades de ganancias, jamás lo olvidemos, pero jamás olvidemos tampoco que debemos tener cuidado con todo lo que hacemos en los mercados al operarlos.

¿Qué opinas sobre el tema tratado? Por favor comenta.

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13 comments
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Your friend could just pause and learn to take action when he should, and refrain from taking action when he shouldn't.

Since his instinct is working perfectly, he needs to learn to harness it while backing it up with thorough research, and preparation around the market he is trading in.

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I agree with you. However, saying it is always easier than doing it. A greeting and thanks for comment.

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Gut feeling is not always accurate, but I sold $TSLA at 900 USD wayback in 2020, that was one of my big shots with stocks and crypto.

I started using machine learning thereafter. CoinGecko has all the data, so it's fun playing with numbers.

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It's true, intuition is not always accurate, but if we learn to use it (as you well saw when you sell TSLA in 2020), is really something useful and important. A greeting and thanks for comment.

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I expect the market will do the opposite of what I think it will do, so if markets do the opposite of what people think what will it do if I already think it will do the opposite of what I think?

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Well, what will most likely happen in that case is that you will surely be right. The point here is to learn to think outside the box and let go of the herd mentality. If everyone thinks the market will go down the drain, then we should aim for the opposite (we need to be bullish); but if they think it will go to the moon, then we should expect it to go back (we need to be bearish).

Nobody said it was easy to do, but this gives us a useful perspective on what is really happening in the markets and what is most likely to happen in the future.

Greetings and thanks for reading and commenting on my post.

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I only have a very limited experience in trading but most of my losses came from greed and fear. Greed and fear clouds my judgement to analyze the market logically.

I think the title of your blog perfectly describes those who jumps in and buy when an asset has already stated rising in price and vice-versa. I believe it coincides with the saying that you mentioned, "be greedy when others are fearful and be fearful when others are greedy". The best time to sell would be when people are buying when the price is continually increasing because they believe that the price will continue to rise because of greed. Of course, the same thing in be said when the market is in the opposite direction. 😁

The difference for me would be assets that have utility like Hive. I am more of a long term trader so I don't mind if Hive temporarily drops in price. It's an opportunity to buy more. 😊

!1UP

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I couldn't have said it better my friend, HIVE is a great opportunity for all of us. I also think exactly like you in that sense. Thanks for reading and commenting my post! Greetings!

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You nail it ,this actually what people are going true in trading,it hard to know when the market will changed trend but we know the market will change trend,about your friend he is not the only one going through that face of trading ,the only solution to this is trading plan which we built our trading psychology on , when the market do this ,I do this ,when the market do this also I will do this

Most important 1:3,1:4,1:5 ratios,this will make cut over trading in the market

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Without a doubt, good capital management in conjunction with a precise and disciplined trading strategy can make a difference when operating the markets. Success also lies, as you said, in risk management, but in itself, there are many other factors that influence success in trading, and unfortunately, not everyone is capable of acting as they should in the markets, hence success in trading is just like an impossible dream for many people. Thank you very much for reading and commenting on my post. Greetings.

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