Crpto Academy || S2 week 4 Homework: Don't Get Lost In The Fuzz

Having gone through your class prof @fendit, and based on the assignment given i composed my answers to the homework given in this post.

Now ordinarily, as a crpto newbie and one who was still ignorant of the much needed lesson's you provided in your class. Let's say i saw Btc price surging up to 62k Usdt, i fomoed in with the feeling that the price will keep on rising and then a few days later Btc has a flash dump to around 54k usdt. Frankly speaking i will sell for fear of losing all my capital in the investment.
The same way i was afraid of losing out i will also be afraid of losing all my funds. Yes that is what i will likely do.

Well having gone through this class i don't think i will be making any of this mistake common to new traders. The thing i think i will especially do based on this class is to set a Stop loss, yes just like prof @fendit rightly mention during the class, price fluctuate most times this may happen as we are sleeping so based on this i think before set any buy order or when entering a position i think i will set a stoploss so my funds will not ride back down to 54,500k Usdt

Taken from bybit app

My Personal Trading Mistake

On a personal note when i did not really know much about crpto all i know was how to buy and to sell, then i was only able to use roqqu app because to me it's much easier to understand and use and it uses my local currency naira.

Now this was around november last year 2020, i kept watching the price of btc going up and i felt that was how it's gonna be so at a point i decided to put in 45k in my local currency(naira) just then it felt as if whoever was controlling the market was waiting for me to enter, then few days later i think sometime during the ending of november the price starts dumping and my money kept reducing. It was really funny.

In that moment of uncertainty i don't know the big picture, i didn't know what i know now that after a bitcoin halving we usually enter a bull market, i did not know that come December 16th btc will hit all time high so i sold out of fear of losing all my 45k in naira. Actually after everything i had a loss of 6k but 39k was left. That was indeed a beginners mistake.

Well ofcourse i learnt my lesson from that. Some things i did learn are as follows:

1. To never fomo in on a coin that i missed which has already made massive increment.
2. To not sell at a loss ever, the goal should be to dip and sell the top.
3. To not enter or buy any crypto asset simply because it is trending, i have to make my own research.
4. And lastly not to put in any more i was not willing to lose, because then i had put in part of my school fees money.

Most beneficial Lesson I have learnt

Well from the course of the class the lesson i think i find to be most beneficial to me especially is never allowing emotions get the best of me.

This is especially true for a coin that seems to be on a massive bullish run, that might have even 2× or more than, instead of taking profits as i rightly should, i will be like what if this coin keeps on rising or even 5× after i takes my money out then i would have missed out. I do sometimes fall victim to this even up to now.

I don't like the idea that the coin would ever drop again and that is bad seeing as my emotion is the one speaking. While Crptocurrency is a game of numbers and facts just like prof @fendit rightly mention in class. So personally that aspect of keeping our emotions in check is one area i think i find to be most beneficial to me.

Never to allow emotions to make me think just because a coin has 2 or 3×, that doesn't necessarily mean it is a good investment at the moment or that it will just keep on going up.

Buying Tesla With Bitcoin

image source

Well knowing the power of Elon Musk's tweet often termed the "Musk's Effect" with a tweet about any crpto be it bitcoin or doge a meme coin it usally surges. Well one won't really blame anyone for fomoeing into any coin because of his tweet i mean he is after all the world's richest man with millions of followers on twitter.

So i must confess before now if i'd see this tweet by him and knowing what usually happens with his tweet i will fomo in without doing any research of my own or even minding if technically or fundamentally it's a good buy at that point in time.

But now after going through your class prof @fendit i must confess it would still be kind of hard to resist the emotion to fomo in, i mean one can literally now buy tesla with bitcoin which means it's now been recognised by such a big institution and even the world's richest man is buying in.

Don't ever follow blindly someone's advise if you're not sure or you don't know what you are doing. Your money and your savings are your responsibility so be careful who you listen to.-prof fendit

These words of prof @fendit above kind of taught me a great deal of lesson so that is why i think if now i where to see something of this nature i wouldn't necessarily just fomo in if i don't understand anything about the project am investing in. I will have to carry out a careful study of my own first before deciding if it is wise afterall to follow the trend.

I mean just because Elon Musk tweet about it doesn't neccessarily mean it is a good investment on the immediate short term or long term basis.

Also another thing that i have learnt from this class that might also help me take a more thorough approach is the lesson of not investing what am not willing to or what i can't afford to lose.

Conclusion

In all i have really gained alot in this class. The need to learn how to control my emotion so as not to make a mistake that my ruin me financially. And also not to allow fear of missing out(FOMO) make me rush in or jump into a coin when the smart money is taking profit.

I should be more carefull and discreet about my choices of investment, to use my head and numbers because numbers don't lie but we may at times lie to ourselve because we want to believe something is true even when all evidence points otherwise.