Crypto Academy Season 3 - Assignment post for professor @allbert –week 5
Hello Everyone, so today I invite you all to read today's Homework on Psychology and Market Cycle subject which is given by Professor @allbert.
So let us continue with our homework.
FOMO: FOMO is actually a Fear of missing out means, in this, a person feels that he/she might miss out on an opportunity, as it can be of anything like fear of regret, or like a regret of not investing in a stock or a crypto market and then will miss out of the profits.
FOMO has actually a negative impact on the psychological health of a person and its well-being.
As if we see in the crypto market the FOMO or Fear of Getting out has become so common nowadays. As because of the inconsistent market. As I have a story to share with you all of what I see in my surroundings some time ago when the price of bitcoin got reached $75k. As on social media, I was seeing that when the bitcoin reach $75k there were people who were investing in it that time and was asking more people too but as I was doing work on STEEMIT and I was also seeing the market going up and to be honest I was also feeling FOMO, Fear of Missing out, but luckily I already had started the Homeworks and have learned new things and also about the FOMO so I didn't jump into that bullish market.
And we now all know the result about that, when the prices came into bearish, as many people lost their money in that.
And the same story came from my uncle. As I know him, he has been doing work in Crypto trading for many years as I guess for 5 years as he was also one of the very first few users who started doing work on STEEMIT. So I never aspect him to get affected with FOMO, But the worst happened and got affected with the FOMO and he buys the bitcoin at $72k and then the prices of it's bearish and he has to sell the coins in loss and overall the estimated loss which I got to know was somewhat near to $82k, and that thing really made me feel bad tho as it is a lot of money though.
So here if we see in the current screenshot which I have taken from tradingview.com, here I have marked the point on which the FOMO usually occurs, some people buy at that point but the whales take their money out from that point, and then the prices got decreases from the Euphoria Psychological phase and it became the Complacency Psychological phase and then the phases go done until the point of fear and depression.
FUD: FUD is actually Fear, Uncertainty, and Doubt, so as we know that it is the opposite of Fear of Missing out or FOMO. It's actually a feeling of loss as in the crypto world it would be the fear of losing the money.
As we have seen the market is quite inconsistent it also affects people's sentiments and swing it from time to time. And as the professor has told us that the FUD is a psychological trick for the people as they see that the price is going down and the people start selling their assets in fear, and they forget that the market works in a cycle and after the bearish point the market will again bullish maybe it can take some time a lot of time but still it goes back to the point it starts.
And as we are having a psychology class related to crypto, so I may want to share a little story of my Fud. So as I have been working on STEEMIT for quite some time and you know the human psychology that the money is never enough for them so the things were earning from there I thought to now start doing trading with that STEEM I have earned
But as I already have started crypto course here on STEEMIT I had some points in my head and I guess I thought to start with investing $100, and at that time the market was bullish and there were even rumors that even STEEM will touch some more than $5, so I invest that $100 in some different cryptocurrencies.
Then after some time, the market becomes bearish every crypto value came into bearish and the amount I made in investment came near $50.
So I just sell those and had a loss of $50, and that was the FUD. In fear that maybe even those $50 will come down to $10 or $20, I sell them.
But now, as I was looking into the market yesterday, those prices came to like $70, and I feel angry to sell it in a hurry.
So here we can see the example of FUD in the above screenshot which is taken from tradingview.com. So here usually buy the assets are the optimism and belief Psychological mind. And then usually buy more at the complacency and Anxiety level but then when the price goes down more to the anger level usually people in fear sell all the assets. And that is how the FUD works.
CAKE/BTC
So let us analyze the CAKE/BTC crypto chart. And here as we can see that the phase has started from the Hope and optimism, where they get to know about the increasing price of the market but they didn't invest in that asset. At that point, the whales have invested in that asset and the price of the asset was increasing.
And then like always after the Euphoria phase the whales have started taking out their money and as the prices started to decrease other people also started taking out their money at Complenancy and Anxiety phase.
And right now if we see at the chart of CAKE/BTC the current psychological phase of the chart is at the depression phase and now the disbelief phase is about to start as the prices are going to increase and maybe the whales will also start investing in that.
So actually this is the phase in which I will buy and then hold for the time it touches the Euphoria level.
LUNA/USDT
Now the second asset we have taken is the LUNA/USDT. In this also the cycle starts with the Hope that the prices will increase, but didn't invest in it.
Then at the Euphoria phase, people must have bought LUNA but the whales start taking out their money and the price of the asset starts decreasing, and the phase of Complacency and Anxiety starts.
And right now in this chart, the Denial Phase has started. And if I had bought at the Euphoria Phase so I must hold my asset for a long time so till it comes to Euphoria again.
And even f I have not invested in this so I will wait a little more for this cycle to go to the Disbelief phase again and I will buy at that point to get a good profit.
So as in the previous question, I have shown you all the 2 assets and their psychological phases, so I guess I will go to the LUNA/USDT one because I have USDT right now in my Binance account.
So Firstly as you can see I am a verified member of Binance and as well as I also have connected my Twitter account with Binance.
So as the professor said to make the purchase of 1 cryptocurrency in the correct market cycle with the minimum amount of 5USD. But as I got into the chart to make a purchase of 5USDT they asked for the minimum of 10 USDT, so I had to make an investment of 10 a USDT in LUNA.
As you all can see that the current market is in the Disbelief phase and after that, there will be Hope so I made a purchase in that market in a 1day time frame. And I have purchased 1 LUNA for the 10.390 USDT.
And here you can see that the order is being filled which means I had made a purchase of 10.390 USDT to buy 1 LUNA.
Conclucion:
So I concluded I just wanna say that this week's lecture was really an interesting one and I have learned a lot from this week's lecture.
I have learned about FOMO and FUD and I hope that I will not make these mistakes in future in my trading and I also hope that I will earn some huge profits from these Psychological tricks.
I now understand that how we also can use Psychology in Crypto trading also.
Regards,
@maazmoid123
Hello, @maazmoid123 Thank you for participating in Steemit Crypto Academy season 3 week 5.
Oh okay, professor I will try to keep that in my mind. Thank you