Steemit Crypto Academy [Intermediate Level Courses] Season 3 Week 5 Homework by @allbert " Psychology and Market Cycle"
Hello steemian ...
This is my new post in the Steemit Crypto Academy community, on this season 3 week 5, I will be working on a homework from professor @allbert with the theme " Psychology and Market Cycle”.
The ability to analyze market prices and emotional control is very important in investing. If you don't have both then you will be very vulnerable to being exposed to FUD and FOMO viruses. Regarding the explanation of FUD and FOMO, we will discuss it through the homework below:
1. Explain in your own words what FOMO is, wherein the cycle it occurs, and why. (crypto chart screenshot explanations needed)
FOMO means Fear Of Missing Out, in the world of asset investment such as in the world of cryptocurrencies, for example, FOMO is the behavior or emotion or mentality of investors who are not controlled in purchasing assets, they buy them for fear of not getting the opportunity to profit when asset prices have increased in price.
FOMO usually often happens to novice investors who are new to the world of stocks so when there is a slight movement in the market or see someone who has become rich because of an investment, they tend to follow it without doing in-depth analysis.
In the following I will explain where the FOMO cycle is and why it occurs:
At that stage, I took the example of the movement of the dKargo asset market. From the graph, it can be explained that an experienced trader will buy on February 17th when the price of Kargo drops to 492 IDR. Then there was an increase on March 15 where dKargo touched 7881 IDR, the price made experienced traders sell their assets because of very large profits (1500% profit). Meanwhile, FOMO investors, when they heard the price of dKargo soared, immediately flocked to buy it because they felt that dKargo would continue to rise and they would get big profits. So on March 15th, FOMO investors flocked to buy dKargo for 7881 IDR, the price for experienced investors is the selling price. tomorrow the price of dKargo continues to fall and makes FOMO investors sell all dKargo for 3747 IDR, on March 24th. they have been waiting for a few days and dKargo did not increase, so they also get a loss (loss 52%).
2. Explain in your own words what FUD is, wherein the cycle it occurs, and why. (crypto chart screenshot explanations needed)
FUD stands for Fear, Uncertainty, and Doubt is an activity or cunning strategy in the stock market to make profits by spreading fear, lies, and doubt to other investors, usually, these investors are beginners and do not have the basis and ability to analyze prices. market. The way FUD works is to make the market price fall. For example, if an asset is soaring high, then FUD starts to work by making investors afraid of losing, then investors sell their assets which causes the price of the asset to fall. Only when the asset is FUD do investors buy the asset at a low price. FUD investors have usually experienced investors who take advantage of the stupidity of young investors to make a lot of profits.
At that stage, I took the example of the ONTOLOGY asset market movement. From the graph it can be explained that on May 9, the asset price was very high, touching 40294 IDR. because the high price on FUD investors spread doubt and fear that the price will drop, novice investors believed it and sold all their assets. As a result, from May 10 to July 20 the price continued to experience a downward trend until it touched the price of 7288 IDR (-81.9%). When the price reaches the low point, then the FUD investors make a purchase.
3. Choose two crypto-asset and through screenshots explain in which emotional phase of the cycle it is and why. Must be different phases.
The two crypto assets that I chose to explain the emotional phase are Dogecoin to explain the emotional phase of FOMO and STEEM to explain the emotional phase of FUD, here are explanations:
- Dogecoin
At that stage, I took the example of the movement of the Dogecoin asset market. From the chart, it can be explained that an experienced trader will buy on April 23 when the price of Dogecoin drops to 2700 IDR. Then there was an increase on May 5 where Dogecoin touched 10500 IDR, this price made experienced traders sell their assets because of a very large profit (profit 288%). Meanwhile, FOMO investors, when they heard the price of Dogecoin soared, immediately flocked to buy it because they felt that Dogecoin would continue to rise and they would get big profits. So on May 7th, FOMO investors flocked to buy Dogecoin at a price even higher than those sold by experienced investors, namely at 10600 IDR. The next day the price of Dogecoin continued to fall and made FOMO investors sell all Dogecoin for 7560 IDR, on May 12th, they have been waiting for a few days and Dogecoin doesn't see an increase, so they have a loss (loss of 27%).
- STEEM
At that stage, I took the example of the movement of the STEEM asset market. From the graph it can be explained that on May 8, the asset price was very high, touching 0.00002482 BTC. because the high price on FUD investors spread doubt and fear that the price will drop, novice investors believed it and sold all their assets. As a result, from May 8 to June 22 the price continued to experience a downward trend until it touched the price of 0.00000620 BTC (-72%). When the price reaches the low point, then the FUD investors make a purchase.
4- Based on the analysis done in question 3, and the principles learned in class, make the purchase of 1 cryptocurrency in the correct market cycle. The minimum amount of 5USD (mandatory), add screenshots of the operation and the validated account.
In purchasing 1 cryptocurrency asset, I will use the Upbit platform, the steps are as follows:
- because my balance in the wallet is 0, then I have to transfer money to the wallet at least 5 USD.
- I also made a transfer to my Upbit wallet of as much as 300000 IDR (20.69 USD). And the picture below shows my total balance after making the transfer.
- After having sufficient balance, I will also buy 1 cryptocurrency asset. I want to buy STEEM assets, but because I can't get from IDR to STEEM, I have to buy BTC first. Below you can see that with 300000 IDR, I got as much as 0.00053684 BTC. Soon my balance increased to 300152 IDR, it happened because the price of BTC rose slightly.
- after I have a BTC balance, then I try to buy STEEM assets, the reason is that the steem assets are experiencing a price decline, which is at 5982 IDR. While this month, steem can reach the price of 6000 – 7000 IDR. So the price I bought was a cheap and good price to purchase at this time.
- This is proof or verification that I have purchased STEEM assets. From the total purchase of the 100% balance that I have, I get 49,333 STEEM.
Conclusion
As someone who invests, we must have the ability to analyze when the price of an asset goes down and up. If you do not have it, then you will be very easily infected with the FOMO virus. Be a smart investor, avoid stupid attitudes that can cause losses for yourself.
Hello @robbee, Thank you for participating in Steemit Crypto Academy season 3 week 5.
In question 3 again you continued talking about Fud and Fomo, but you did not perform the analysis about what phase the assets were currently in. For example, hope, disbelief, anxiety, capitulation, etc. Unfortunately this shows me that you did not understand the topic of the class or the minimum requirements that I established.
However, I recommend that you do not give up, and for future classes make sure you read and understand the class correctly before publishing.