Bitcoin Weekly: Breaking Support

Last week we were moving along dangerous levels were flirting with the February lows. This week however the bulls couldn’t defend the key $6k support level and we broke down. Sentiment in the market is becoming increasingly dire as the resolve of hodlers is severely being tested. The key question that is on everyone’s mind is whether there is any bottom in sight. 

Trading without a Plan

This week a lot of people messaged about their bitcoin holdings. Sellers panic sold their holding and others bought thinking this is a good time to get in. Warren Buffet has said that the financial markets are designed to transfer wealth from the impatient to the patient. To give that more context I strongly believe that the markets are designed to transfer wealth from those who do not have a plan to those who do. Patiently holding a bag of crypto with the hope of it going to the moon is an example of a bad plan. Before you buy any financial asset one needs to have a plan that they need to follow. Which clearly outlines the reasons for them to buy or sell. Additionally we need to have price objectives and stop losses in place. Along with the time horizons of your trade. 
The market is full of participants who are swimming naked at the moment. As the tide pulls back a lot of them are being exposed. If you are caught in such a situation take stock of where you are build a plan now. It is never too late. If you need help take our crypto course and level yourself up.

Trading Psychology

Trading and investing are performance fields. Like athletics, trading and investing are outcome oriented activities. Like those fields we need to continue to practice and develop our skills. Psychology plays a huge role in the development of this skill.
To start off with we need to pay close attention to our emotional state. To operate at our peak we need to be completely focused on what we are doing. For example looking at all the reasons for the trade, executing it and then living with the results. If we start to focus on the outcomes or even ourselves that is when things start to unravel themselves. If you find your emotional state is making you overly concerned about an outcome rather than your process, it is time to take a step back. 
The other part that you need to focus your energies on is cognitive development. If you are wanting to achieve above average return you need to not share the general consensus view. Time needs to be spent researching and taking in all the market data to come up with winning ideas. Many times in the crypto world we are following some hot tip or a paid signal that stunts our growth as traders as investors. Stop doing that and develop your own ideas. 
Lastly you need to put into perspective why you are trading. It has to be more than just money. When we link our ego with an expected result that we do not have control over there is an immense pressure that we put on ourselves. Things will never always go according to plan, we will be wrong and if our picture of our-self is so closely linked with a result that we do not have control over; we will undoubtedly swing back and forth on an emotional roller coaster. 
Build the necessary control over your psychology and you will soon see yourself trading better.

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