Steemit Crypto Academy | Season 2 Week 4 Homework Post for @fendit - Don't Get Lost in The Fuzz

Hello everyone. Our world has been fighting a big epidemic for more than a year. I hope all of you are in good health. Stay healthy! Thanks for reading.

Today I will share with you the my homework given by the professor @fendit

Introduction

In this lesson, professor @fendit talked about the importance of psychology in trading. This is a very important issue. This is the main reason most people lose money. Money lost as a result of these mistakes can lower our living standards and psychologically depress us. FOMO, revenge trading, overtrading and stop loss are the main issues we need to pay attention to.

A) Place yourself in the following situation:

You bought BTC a couple of days ago at a price of USDT 62K. Suddenly, you see that this situation is going on:

What would you have done before reading this class? Explain in detail if there's something you would do differently.
With the pandemic, the cryptocurrencies was constantly on an upward trend. People were constantly profiting. Of course there would be a correction. In my country, cryptocurrencies were constantly being the subject of even news. Because the economy was bad, people were looking for alternative money making. Even people who do not know the slightest about cryptocurrencies have signed up to exchanges with this hearsay information and bought coins. The vast majority of these people took coins from the peak.

I remember the correction from that day. There have been very sharp downs and many people have lost large sums of money. There were even people who committed suicide in my country. He had sold his house and entered the crypto market with all his money and lost most of his money.

There was no crypto coin in my portfolio that day. I am an impatient person. I don't have nerves like steel. If I had crypto coin in my wallet that day, I would probably panic sell from the dip zone. I could have lost big money that day. I have been knowing about cryptocurrencies for a long time, but I am new and inexperienced in trading.

What would you do now?
I would plot the support and resistance zones on the chart. I would determine the regions where I would buy or sell. Then I would try to leave this correction with the least loss by entering a stop-limit. Because the bull market has been going on for a long time and it is not clear when the bear market will come. Perhaps crypto markets can enter the bear market at any moment. It would be the right move to exit this bear market with the least loss. In short, the key point would be to secure myself by entering a stop-limit order.

B) Share your own experience when it comes to making mistakes in trading:

What mistakes have you done when trading and what did you learn from them? If you have little experience when it comes to trading, tell if you got to know about someone else's experience.
The first mistake many people make on the cryptocurrency exchange, including myself, is to act on others. When I first started trading cryptocurrencies, I was neither looking at the chart nor the developments related to the coin. I was just following the post of the phenomena I followed on Twitter. I had never improved myself, and I was fulfilling other people's wishes without knowing anything. I can make an analogy to this event like this: Think of the cryptocurrency world as a deep sea. I was entering those deep seas without knowing how to swim, and I didn't use any protection to not sink in those seas. When I stopped and thought a little, I saw that I couldn't make any profit. And on the contrary, I have seen my capital melting away by constantly making small losses. The first thing I did was to stop following those phenomena. I stopped trading coins for a while and started learning the basics of reading charts from youtube. I watched continuous training videos for about 2 weeks. Now I look at the chart when trading and I know at what point to buy the coin and at which point I will sell it.

Which of the strategies discussed in this class you find the most useful for you? Why?

As I said above, investments are all about finding the right time. If you didn't have that coin before it rushed it's value, it's not the best idea to get into it, as you're going to buy it at an expensive price. It's always better to study it's varaiation through time, take a look at it for several days and then, when you see that the price has decreased a bit, then buy it.

I think this is the most important issue the professor talks about in this course. It is most important to invest at the right time. If we get caught in FOMO, we will most likely lose our money. We have to control ourselves and wait for the right moment.

C) Place yourself in the following situation:

You're browsing Twitter and you see this:

You see that whenever this kind of things happen, BTC prices rush. What would you have done before reading this class? What would you do now? Explain in detail if there's something you would do differently.

No matter what kind of experience I have after seeing Elon Musk's tweets, I still buy it. Because after Elon Musk's tweets about DOGE, people made 10x profit in almost 2 weeks. He has tremendous power in social media. He can easily direct the masses. If you remember, he had tweeted about DOGE recently. After that tweet, it becomes impossible for me to read graphics. The graphic is starting to act completely outside of what I know. After this situation, I make completely emotional decisions. If we get lucky, we will make a profit, if not, loss… Until this time, what attracts me is that people do not loss after Elon Musk's tweets.

Of course, I always add a stop-limit order after my trades. If I am going to lose, it will be best for me to lose the least amount. Also, I never invest all of my capital in a single coin. I absolutely secure myself and invest amounts that I will not be sorry for when I lose money. As I see these psychological situations experienced by the people around me, I avoid these mistakes and try to minimize my loss.

Conclusion

The main thing professor @fendit wants to give in this lesson is the psychological conditions that we need to pay attention to when trading. It is necessary to know well the psychological situation we are in. If we know and recognize these psychological situations well, it will be as easy for us to get rid of these psychological situations.

CC:
@fendit