Thank you @asaj for the lesson and Home Work Task. Below are the attempts:

BACKGROUND

Having gone through the case study in the lecture, I deduced that the case study is an example of a trading psychology.

MY REASONS FOR THE ABOVE DEDUCTION

We can say that a trading psychology refers to the behavior of an investor or a user when they are making important decisions concerning their crypto assets.

From the case study above, we can see from the behavior of the said character (jane) in relations to the signer she got from her telegram account, the first thing we noticed from her demeanor is that she first reacted with fear and as a result of that, her entry into the crypto market was done cautiously but along the line as her transactions began to yield favorable results, her behavior was that of greed which was the reason why she left her profit in expectation of gaining more profit, this also led her to purchasing more coins when the price began to fall.

However contrary to what she expected, she began to experience losses and in fear she sold all her coins while anticipating an even greater loss.

This psychological behavior has in a way happened to most traders of cryptocurrency, without an exception of myself, jane acted without paying close attention to the conditions of the market, this resulted in her not being able to lay hold of her emotions. She didnt do a thorough analysis of the market before venturing into it.

THE BIASES THAT INFLUENCED JANES TRADING BEHAVIOUR AND EXAMPLES OF HOW IT AFFECTED HER BEHAVIOUR

EMOTIONAL BIAS: this bias occurs when a trader begins to make decisions according to his or her feelings. This could be seen in the case study used for this lecture, Jane was driven by her feelings which led her into not making careful market survey before venturing into the crypto market. First, Jane ventured into the crypto market with surveying the market, Secondly, when the token she purchased didnt go up, she became afraid and quickly sold her asset and when the price began to rise, she was filled with regret.

TREND CHASING BIAS: This bias has to do with following the success stories of individuals, or following past events and present events taking place. The reason why our character (Jane) in the case study placed a buy order in the first place was because she say that the token had moved from the entry point of $9 to $15. That is to say if she had not noticed any past success from the said coin she wouldnt have placed a buy order. Her entry into the crypto market was based on stories of the past success and present achievements of the coin she wanted to buy.

HERD MENTALITY BIAS: this is the psychological behavior where an individual joins groups and begins to carry out actions because of the actions of others. The investor who exhibit this behavior tends to gravitate towards similar investments that have been made by others, this can also be referred to as the Band Wagon behaviour

CONFIRMATION BIAS: this is a psychological situation where we tend to begin to look for a means of justifying our actions and our beliefs without considering facts and evidences that does not justify our actions, this we can observe from Jane's behavior when she made the decision to continue buying the said coin.

At the point where she sold her coins she began to look for evidences to justify her action, this could be seen from her reaction when she read that the token will continue to fall on telegram, she was happy neglecting the fact that when a token experiences a drop in price although coming up might take a longer period, it will definitely experience a rice in price.

DISPOSITION BIAS: This is a psychological situation where a trader refuses to accept their trading mistakes but rather begin to look to means by which there can justify and prove their decisions right by holding their position even when they see that there are running at a loss. This can also be seen in the psychological behavior of Jane when she decided not to sell her asset even when the price value was dropping but instead she decided to prove her decision right by buying even more. This affected her trade in the long run.

HOW TO AVOID THE ABOVE MENTIONED BIASES

Avoiding the emotional bias: this bias can be avoided by critically analysing and understanding the marker before entering, being able to control one's emotions is also key in avoiding this said bias. If Jane had been able to control her emotions, she would not have made the decisions she made in a hurry. It is important to note that everyone get excited on seeing a lucrative opportunity, but it is also imperative that we settle down to analyse our action, put necesary measures like our entry and exit strategies in place.

Avoiding the trend chasing bias: before entering into the trading market the investor must have at heart that the fact that someone succeeded in trading does not imply that you will succeed, do not define your trade by past and present successes of the token, you must have a concrete and genieune reason why you want to buy the token.

Avoiding the herd mentality bias: dome persons enter into the crypto market because they want to feel a sense of belonging, this bias can be avoided if the reason foryour trade is not tied to the fact that you know someone trading it. This still balls down to defining why you want to invest in a token.

Avoiding the confirmation bias: Jane could have avoided this bias if she faces the fact without trying to justify her actions, it is imperative that a trader be able to call a spade a spade and not look for means by which there can justify their actions.

Avoiding the disposition bias: the ability to accept what ever outcome the market presents is an important quality of a good trader, a trader must be prepared to accept their loss just as they did their profit.

ANALYSIS FOR MONITORING MARKET PSYCHOLOGY AND TRADING PSYCHOLOGY

It has been established that market psychology is the overall behavior of every traders of cryptocurrency and Trading psychology is the behavior of individual that affect their trading pattern, we can make use of the technical analysis to identity market psychology, this is because the technical analysis enlightens us more than when we desire to use fundamental analysis. The technical analysis has to do with certain data's such as indicators, market volume, charts and the likes to monitor the future of a token you plan on investing. It can be used to predict prices, market, the RSI, MACD etc.

This technical analysis can be employed in finding the state of investors trading psychology, from the chat trend we could literarily be able to ascertain the behavior of investors in the course of their trade

WHAT IS THE DIFFERENCE BETWEEN TRADING PSYCHOLOGY AND MARKET PSYCHOLOGY

Trading psychology is a situation where a trader takes trading decisions without careful planning and observation of market conditions. While Market psychology is as a result of the behaviour of all investors of a token, the combined behavior of the traders have the tendency of affecting the market value of a token.

MEASURING MARKET PSYCHOLOGY USING CRYPTO CHART

Measuring the market psychology of an asset is quite easy, all you have to do is to pay close attention to the chart trend, let us check out the chart for doge coin and then use it to measure the market psychology.

Let's take the points circled on the chart as:

Green -point 1
Red - point 2
Blue - point 3
Purple -point 4

From the chart above we can observe that the market chart had a steady trend from the start. Later it began to rice up to the peak.

POINT 1: at point green, the market trend did not experience a sharp rise, this is to say that both buyers and sellers are at equilibrium, they do not rush into making decisions.

POINT 2: at point red, the market has started rising sharply due to the presence of market psychology, at this point, the investors believe that the price will continue to experience an uptrend and so they rush for the opportunity to buy before it goes higher.

POINT 3: at point blue. Traders continues to buy the token with the hope of selling it when the trend moves higher, at this point the market demand for the token is very high.

POINT 4: at point purple, at this point the price of this token begins to drop, causing traders to panic with the thought of the probability of the prices not coming up again and so they decide to sells their assets in order to minimize loss.

BIASES THAT CAN CAUSE A COIN TO BE OVERBOUGHT OR OVERSOLD

The emotional bias: referencing to our case study, just like Jane, emotional bias can cause traders to over buy assets when the price is down, this can cause the market trend of a coin to experience an overbought situation. It can also cause fearful traders to sell their assets resulting in an oversold situation.

The trend chasing bias: when traders see that there are persons reaping profits from a token, they would also want to benefit and so we begin to see that the token will be overbought at that time but when some persons start experiencing losses, traders tend to begin to sell their coins so as not to be affected by the loss, this will bring about an oversold situation.
Herd mentality bias: ingesting in a token because of persons can also cause a coin to be overbought or oversold.

Confirmation bias: when a buyer tries to justify his actions, they might end up buying more coins like Jane which can result in an overbought situation, also if buyers neglect the fact that the coin can rise again they might end up selling their coins resulting in over sold situations.
Disposition bias: just like the confirmation bias, when buyers are not ready to accept their mistakes, they might end up buying more or selling their coins which could result in either an overbought or an oversold situation.

EFFICIENT MARKET HYPOTHESIS

It states that there will always be a competition to make profit in any free market, it says that the price of commodities in the market experiences changes according to new informations that enters the market, this therefore makes it impossible for the sellers to sell their commodities at a lower price or a higher price than the market value.

ADVANTAGES

It saves investors from being cheated: since the price is fixed, buyers can be rest assured that they will not be cheated.
If duely maximized, it can yield higher profit for sellers.

DISADVANTAGES

The existence of irrational market: the market price is not consistent, as information may come that will reduce the price of the market at any time. It will require you to possess a high level of skill
It is also quite risky if you do not have a good understanding of it

CONCLUSION

In effectively trading, a trader must be able to control their emotions, so as not to make unnecessary mistakes like Jane in our case study.

Thank you for reading my post.

Cc: @steemcurator02