Without doxing myself, I can let you know that I am an educational psychologist. I teach and conduct scientific research and specialize in (supported) learning. In this post, I will try to share some of my knowledge and thoughts. It is partly based on scientific knowledge and partly based on my understanding of the markets through research. I try to do an hour of research every day.

I hope this is helpful to some and look forward to your thoughts and more. If people like this kind of content let me know and I’ll see if I can write more sometime.

(1) Learn to recognize and reverse your emotions

A key aspect of being a successful trader is mastering your own emotions. The market is volatile and will play with your emotions to try to act on impulse (system 1 thinking) instead of reason (system 2 thinking). It’s up to you to train yourself to rely on System 2 thinking because you’ll make fewer reasoning errors when you avoid acting on impulse.

  • At the top, you’ll feel happy, which brings out positive emotions like happiness and excitement.. This is why so many people impulsively FOMO here.–> Recognize it and force yourself work More downside, for example by taking partial profits or setting stop losses at profits. This is the time to be careful.

  • Below, you will experience negative emotions such as panic, anger, and depression. This is why many people sell on impulse panic and continue to believe that the price will go down (“$10K EOY 2022 is guaranteed!”).–> Recognize this and know that negative emotions are a good sign if you can invest more. . This is necessary because markets (are) down when you feel bad. When everyone panics and sells, you might consider investing more and buying fear and blood. The FTX collapse was a perfect example here.

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The sentiment is decently summarized by the Wall Street cheat sheet, which also applies to crypto. The key is to learn to recognize your feelings when you look at the charts (“What am I feeling?”) and to apply your knowledge and logic to them.

(2) Identify and be aware of key retail stories and priorities

A related example is that the key is to identify the main stories that (most) retailers believe, because often retail gets it wrong. About 90% of investors lose money, and this figure is even higher among the retail crowd. What were some of the key stories in recent years that turned sour? Most retailers believed that:

  • Bitcoin will reach $100K EOY 2021

  • Bitcoin was a hedge against inflation

  • Bitcoin will be below $10K-$14K in EOY 2022

  • The price of Bitcoin may not have reached an all-time high under the previous cycle

  • Bitcoin will gain more dominance relative to alts in bears

All these beliefs did not work. The general consensus is almost always wrong. r/cryptocurrency is a great indicator for consensus. This also applies to the choice of projects and when to buy and sell.

How can you apply it in the future?

Well, ask yourself, what are some key considerations? One of them is the Bitcoin halving, which is believed to trigger the bull run. So, we Could be very good Look for something crazy around half time, like an initial pump to get retail, followed by a mega dump to punish retail.

(3) Focus on learning and development

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A major misconception that people believe is that investing and trading is mostly about luck and randomness. Although there is chance involved (as in poker), trading is a skill, and a skill that people can learn.

There are many people who invest/trade profitably in this space with or without profit. Not all of their trades are successful, but overall, most trades are successful, because knowledge and skill increase the chance of a coin flip above the level. And an understanding of risk management prevents losses from escalating.

How to increase your knowledge and skills? Well, people use a combination of tools to raise odds, such as fundamental analysis on cryptocurrency projects, technical analysis (yes, really), understanding of the broader financial markets, identifying trends, and more. The more you learn, the better you can choose the right projects, identify the best moments to buy and sell, and manage risk.

Finally, try to be open to different ideas and opinions. Only if you understand the counter-arguments and different perspectives on your ideas or favorite projects can you build a complete picture of a project or tool. Most people are stuck in their own thinking and therefore make biased decisions and make biased preferences.

It’s not about being right or wrong, it’s about learning. And one can focus on learning long term while surviving and thriving in the crypto market.

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