All in Speculation

Effects of an Underlying Irrational Mindset on Trading Crypto

“What separates the consistent winners from everyone else?”

The consistent winners, the five percent, profit consistently from the other ninety-five percent. They’re systematic and ruthless.

If you sit down in front of your computer, fund an account and begin trading in cryptocurrencies (or any other financial market) without an understanding of edge, position size and money management, the odds are high you are going to become a fully paid-up member of the 95% club.

You might as well take your seat at the slots in your local casino.

Perhaps you’re thinking, you’d never play the slots because it’s a mug's game.

If you start trading cryptocurrencies without an understanding of your biases, (and how they affect you), and without understanding your edge, you might as well be sitting in front of the video game reels pressing the bet button.

Ignoring the Voice Inside of One's Head: Guide to Fact-Based Investing

Going against the crowd is hard because acting alone and answering only to yourself goes against your inbuilt biases and years of experiential life conditioning. We are trained to recognise authority and respond to an authority figure.

We think we’re in control. But studies in behavioural economics has shown we are not. We use a personal collection of subconscious biases and behaviour patterns to help us get through the day.

It could be a perceived expert from your bank or brokerage. It could be a TV talking head, or it could be an article in a newspaper. If you’ve taken a position and you read, see, or hear something that goes against your authority, it will be difficult for you to resist second-guessing yourself. 

If you aren’t clear about exactly why you should take a position, you’ll find many catalysts waiting to either stop you from getting in or spook you into getting out too early.

Success and Failure in Bitcoin Trading Are Separated by One's Confidence

Pushing the envelope, and on the edge of out of control. This is “Chuck” Yeager describing what it felt like as he broke the sound barrier. 

And so it is with trading. Trading and investing in cryptocurrency markets is like traversing a fine line between success and failure. You’ve got to take the best information available to you and make a decision. It’s impossible to know the outcome. There are no guarantees. None.

How do you know when to push it? How do you know when to punch through?

It’s all about trust.

Asking the Right Questions Overshadows Never-Ending Educational Success in Trading

The 95% make decisions not with their heads, but with their hearts. They take their ideas from others and rarely use their wit to figure out a strategy.

Most delay taking any action until FOMO, the fear of missing out, has them in its grip. The 95% use technical analysis tools to help them make decisions.

The most common tools the 95% use are moving average momentum indicators. Simple moving averages, multiple moving averages, moving average convergence divergence, and stochastics. They use different moving average lengths to predict highs and lows in markets, but which indicator and settings work best? And there’s the trap.

Pro traders know their point of reference before entering into a position

Most people are dissatisfied with their lives. And paradoxically, it’s not the demographic you’d expect. The most disenfranchised with their lot is often the most outwardly successful.

It’s because they’ve done everything the system asks of them, and yet they know within themselves they were promised more. Somewhere between 35 and 45 years old, and stuck on the freeway, there comes a time when they ask, “Is this all there is?”

And this is why the lure of magical systems is so persuasive.

The 95% ask themselves, “What if…”

Cheap doesn’t measure price against price; it measures price against value

When you invest, the only thing you have control over is the price you will pay. Every time you look at a market’s price, you can choose to buy or not buy.

This week Ripple had a slew of positive news releases relating to the adoption of XRP, the Ripple protocol currency, and the announcement that xRapid, the cross-border payment system, is going live next month.

Huge volume accompanied by good news. Does this mean the bear market in Ripple and cryptocurrencies is over?