Not Financial Advice, Rather, An Evolutionary One
A cat wakes up in the morning and does it's traditional ritual behavior. It stretches its front legs and then applies saliva on its arm so it can wash it's face. It then continues with the rest of the body. If you are around, it will make funny sounds while rubbing on your leg for food.
All animals are ritualistic species. The wisdom of evolution dictates that such behavior is vital for one's survival. Humans are no different. We cry in certain situations, most go to work 8 to 5, concentrate on family, similar hobbies, actions and activities. From afar, we are just like ants, going about our daily business. What makes us unique and special individuals is just the exceptions to the rule that are only observable from a narrow focus perspective. A cat or an ant would argue about individuality much the same. Most humans are not even able to tell apart individuals from different races if they haven't been exposed to them before. This is how blind we are to other species and how other species are blind to our uniqueness.
For this reason human behavior can be somehow predicted on the long term. The more one zooms out the clearer the picture. Randomness makes much more sense with more data, revealing trends and pathways that cannot be clearly seen from the daily noise of watching things unraveling up close to us.
Whether we observe Bitcoin or FIAT markets the effect of this phenomenon is much the same. Economies go in cycles and irrelevant of the subject in examination. They do so because humans are ritualistic beings with very specific and predictable behavior. If one is patient enough, they can see the entirety of financial history unravel before their eyes.
The sad part is, part of the ritualistic part of most humans, is to be in a rush. It is much of a ritual like any other. This disables most from seeing the big picture and instead allows themselves to get tangled in the pointlessness of daily market moves where randomness is king.
Much like most things in life, in order to succeed, one has to step back and control the self from the pettiness of the crowd. Yet, much like most diets and exercise plans most fail because that would mean to step away from reality itself. The way modern life is structured, it demands that we immerse ourselves into magical screens and information that travels through it without being able to confirm and rather take as face value, or worse, that everybody else does. It is similar to trying to fast while everybody is gorging themselves in delicious food. It is nearly impossible.
Even me pointing out these peculiarities does not make much of a difference since at the end of the day right after you finish reading this you will go back to your old rituals, almost forgetting completely what you just read. I have a different solution but for most is too much to bear. I am socially cut off, almost off the grid in a remote place where my mind can escape my default ritual behavior better. I say "better" because I am also a victim of this. We all are. I try to tackle the automaton of my human nature by creating secondary rituals that hold me back from performing stupid actions like buying in FOMO or selling for FUD. This is how I maintain a plan that aligns with a longterm play, without bothering if I am selling the top or buying the bottom. I guess, this is also how I maintain my sanity. Ironically, sanity is nothing more than behavior agreed from the ruling majority that gives in to its ritualistic nature.
Greed is what drives FUD and FOMO. Because of human nature this will never change. If you buy or sell just because others are doing that, have no sense for me...
As is written in the psychology books, human behavior is like horseman and horse (conciseness and subconsciousness). The horse (subconsciousness) is making 95% of the decisions, and it is highly automated. In this way you don't need to think about every single thing and go crazy. Evolution made this so we function with ease.
But your conscious mind can change the subconsciousness decisions with focus. So when doing something important be highly focused, and don't do it all day long because you can't keep focus all the time.
What do you do when FUDomo strikes?
Fear uncertainty and doubt of missing out?
And a problem with the long term view is.. is this down cycle the last one? Bear Stearns was a hellava buy, just before it was no more.
With cryptos, i believe we are just at the beginning, so buying all the pull-backs is an excellent plan. But, although cryptos will continue on their path to the moon and beyond, a particular crypto could disappear.
Like EOS could have a horrible failure after launch that costs them all credibility. Or any of dozen other things.
My cold storage is far away from me and I need to be in 100% mental fitness in order to solve the puzzle and retrieve it. I have nothing written down. Everything is in a form of mental puzzle that needs hiking and waiting in order to get revealed.
Honestly I don't care even if everything goes to shit. Crypto is not my only strategy.
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You have a good strategy. Stick with it.
You touch upon an area that is close to my heart in a very easy to understand way- Behavioural Finance or Neurofinance!
A really brilliant and easy to relate to post.
Many Thanks
@shenobie