In times of all time highs – why some of us are getting crazy
In my distant past, I was working for a bank and I was a very active trader with options and shares. This was probably one of the worst time in my life. I was constantly stressed out.
Why? Because trading is totally contrary to how we human function.
In trading our emotions are our biggest enemy
Whatever strategy you follow, your instincts and your emotions will not be in favour of your actions. At the time we were taught to look at trading like gambling. We simply had to find an edge that would give us the necessary advantage to make gains. We tried to get this edge through chart analysis. However, this only worked if you could blend out your instincts and your emotions. It wasn't my best time and I remember my negative moods when the things didn't develop as I planned.
From this experience I've learned some important things:
- Trading is nothing for me, it makes me sick. That's the reason why I've stopped trading altogether.
- If you want to be successful with your investments, you need to blend out your instincts and your emotions.
All time highs is the best time to get crazy
With these all time highs on the markets, we are getting crazy just trying not to miss out on opportunities. If only we would have bought dogecoin earlier, if only we had some more btc... Now if you have these tokens that are going to the moon, how long should I keep them, should I sell or not ?
If you don't take care, you can ruin your health in such a situation...
When you look at charts, don't forget to look at the line...
If you look at the price development of a coin try once to pay attention to the line that is drawing the chart. One important thing about this line is that it always continues to be drawn. There will be a price at any time in history (if the coin doesn't default of course). This means you will always be able to buy and sell the coin. Today, tomorrow, in 10 days, in 2 years.
When you look at this line, you will also see that there is never one line that goes up without coming down from time to time. Prices fluctuate regularly which is totally normal simply because of human nature. When there is a steep price increase, some of us will want to take their earnings and sell. This will lead to a drop in price before others see this as an opportunity to invest and the price goes up again.
Looking at the line of a chart, shows you that there is no need to be stressed or scared. It's difficult to being patient in such situations but there will always be opportunities on the markets but you only have one body and one mind that should remain healthy. So be careful with them.
My way to invest without ruining my health
When I look at a token or a coin, I try to look at the fundamentals and by that I don't mean the chart or the price. I look at the supply, the progress of the supply, the use cases, the stake rate, the liquidity on the market, the general demand, the development, the burn rate. Looking at all this, I decide whether I believe that the price of this token will increase or not.
Don't get fooled by the price of a token. The markets are crazy. Look at the supply and at the demand.
If I believe a token looks promising, then I will start to accumulate it. Buying a little every day or every week, then staking and curating with it to slowly build my capital.
The best thing to do is to build a return in a token that might increase in price.
This way, I try to develop as many income streams as possible in tokens that look promising to me. But well that is my way of doing it. How about you?
How do you deal with this situation with all time highs on the markets?
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the sort answer is greed and fear!
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That is quite a good answer. They are both not very pleasant emotions I believe :-)
!ENGAGE 20
ENGAGEtokens.What a great article!
In the end, I think it all comes down to the following:
or
Money can be a fantastic tool to use, but for that you have to be in control.
When money controls you, on the other hand, money is a horrible taskmaster and can destroy you!
This is so important what you mention here, with (in my opinion) patience being the key element.
Thanks for sharing your experience and knowledge with us!
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Thanks a lot for your great comment!
This is so true. When you loose control then greed and fear are with you in a rollercoster of emotions that can end up quite badly.
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ENGAGEtokens.Thank you for the tokens! I do appreciate it!
Very beautifully explained. I just sold a part of my AAVE now, to book profits, its gone up too HIGH!!
Well, ATHs are in and like people who have not entered earlier are like...Damn!!
So, for them, wait and watch, buy at the dips and not absolute highs and for those invested, sell when tokens have gone parobolic and signs of exhausion are in place!!
That's good enough.
I invest in cryptos after some research not simpily after hearing about it even if it moons...because I need to know the coin I put my money on, that's all.
See market cap, team, use cases, tokenomics(try to) and the projects that are getting built on it. So, some investments other than BTC and ETH which are safe to invest came up like Polkadot, cosmos, it had DEFI projects built on it and good fundamentals in terms of scalability, interpolibality and Governance and stuff like that.
During bull run, its not stressful if you brought at lower price and waiting for price appreciation but stress is coming up to sell ofcourse...because transaction fees and all, for ERC-20 tokens transfering from wallet and exchange and exchange and stuff, but just be cool as long as you make profits!!
When I traded I was in a way never happy. I could have bought cheaper, I could have sold at a higher price, I should have kept them it still went up after I sold,...
In then end what you say is so true:
We should be happy with every profit we make and enjoy it :-)
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ENGAGEtokens.Ahhhh! You are a former trader. That explains a lot.
Former reformed trader LOL. No more trading for me :-)
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ENGAGEtokens.I usually just go in with a plan. If it's long term, I know I am waiting for at least a year so it's set and forget. Occasionally, I might just sell some covered calls if it's the stock market. If my shares get taken, I make a profit and if it doesn't, I got some free money.
For short-term trades, I usually go with certain profit targets and where I will get out. I will only take trades where the risk-reward is in my favor. Either way, less stress since you come in with a plan.
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Going into trading with a gameplan is a very good habit to take. Like that you can also blend out some of the emotions. You start with situation A, if B occurs you sell. That helped me a lot as well.
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ENGAGEtokens.I have forgotten the feeling of the "real" trading... For the past 3-4 years I was mostly buying crypto, and sometimes sell, and re-buy, but I don't count that as trading...
Back in the past (over 10 years ago), I was learning about trading, candles, indicators, TA, etc... and I was a bit in the FOREX trading and had exactly the same experience as you... I couldn't sleep when I had some open trade, was always nervous, unhappy in general... And then I stopped with trading...
I don't know why, but a month ago I have decided to try it again, but this time with crypto... Opened an account on Bybit, deposited some funds, did a bit "smarter" my money management... I have forgotten those bad memories from the past, but I got reminded very fast... So, long story short, I think that my "new" trading story will be shorter than the first one... lol... Will see... :)
I don't mind ATH prices... :P What I DID learn, is to have SEPARATE HODLing portfolio, which is used only in the case of emergency... and that portfolio is going very nice these days... :)
Cheers!
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They told us that full time traders are used after a maximum of 5 years. Fortunately trading was only a small part of my job but it was enough to drive me nuts :-).
Today I definitely prefer to accumulate slowly and boringly. I don't need the stress LOL. Thanks a lot for sharing your experience!
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ENGAGEtokens.Amazing article, amazing ideas. I am just questioning myself if I just should do less trading and follow more investing... this match perfectly the last strategy you mentioned. I did this patiently with ADA since last year, it looked like no progress. I left aside as it was giving rewards by itself. I didn't care about the price. Last week I just realice how great it is going. I am just trying to keep my plan and not get fool!! (To invest for long term is resulting the best).
When I was investing in shares, I realised that the best way to get a solid return is to invest in high paying dividend shares. First of all you get regular dividends and secondly people will always want to get a return and these titles are much more demanded and increase in price.
The same is also true for coins and tokens. If you invest in something that gives a natural return you can just let it grow. In the long term people will be drawn to such assets and they will also go up in price. It's a slow progress but it's the most profitable one I believe. If you diversify in several holdings and you build them up, maybe one day it will explode and you will collect the rewards :-)
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Your are right @achim03, and finally the things i am learning in trading allows me also to choose an acceptable if not great project... the things I am discovering!
ENGAGEtokens.