Fear of missing out
Just because everyone’s buying an asset, I felt I don’t own some of it, I am leaving out a big opportunity. This fear pushed me to invest 100% of my balance at the wrong time. By the wrong time, I mean when the price is at ATH (all-time-high). I assumed that it will go even higher, just because everyone believes so.
Taking assumptions for facts
Much later I realised, no one knows whether the price will go up or down! Yes, no one knows, let that sink in! Everyone has a way of justifying their trading decisions. I didn’t know how to justify mine! so I gathered bits and pieces of information and comments from other traders to gain enough confidence to either buy or sell. In other words, taking assumptions means I don’t have strategy or clarity.
I invested all my money when the price hit an all-time-high time and expected to double and triple my gain in a month time! Well, the bubble burst and I was in red for about 4 months before I gave up and cut my 80% losses. Only if I had waited until 2017 I could retire in my 30’s :))
Seeing Dollars and not Percentages
A sure way I nurtured greed and impatience in myself was to look my gains in dollars. Especially if you start trading with smaller amounts, there’s a tendency to care too much about the amount of money you are making. This greed will eventually lead to irrational decisions. Whereas seeing growth in percentage brings gratefulness and satisfaction.
Whether the crypto prices will eventually soar to the moon or tank to the ocean floors, I am prepared, here is how:
I just see them as any other Forex currency pairs only with much higher volatility!
- I use technical analysis to identify channels along with the strongest support and resistance levels.
- I buy when the price reaches the previously identified support level. This is usually when you see a long red candle on hourly or daily charts. It is also known as “buying back the dip”
3. I don’t do margin trading so that I can have quality sleeps at night! :))
As you can see the current channel is trending up, therefore every relatively large dip is an opportunity to buy. Unfortunately, I missed that dip as it happened at midnight and I was fast asleep.
This is my short term strategy. I usually hold a position for couple of weeks and take profit at 20% to 50%. It is very conservative, but I believe in consistency and being grateful for today rather than hoping for a tomorrow no one has ever seen! That’s my humble philosophy that has worked for me and I were able to enjoy the money that I earned.
Just in case the famous “going to the moon” ever happens, I invest and hold 10% of my equity in crypto assets stored in a wallet.