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Hello everyone,
I'm very grateful for the Lecture and the significance of this lectures will be helpful to avoid losses or deficiency in trade.

Thanks to all the crypto-professors especially @asaj for this wonderful class and the homework tasks was given as stated below with my simple answers will forms the sections of this post.

PART A ( CASE STUDY)

• THE CASE STUDY GIVEN IS THE EXAMPLE OF WHAT TYPE OF PSYCHOLOGY? EXPLAIN THE REASON FOR YOUR ANSWER

• USE THE CASE STUDY GIVEN, STATE THREE BIASES THAT INFLUENCES JANE'S TRADING BEHAVIOR AND WITH EXAMPLES ON HOW IT AFFECTED HER BEHAVIOR?

• LIST AND EXPLAIN HOW THE THREE BIASES MENTIONED CAN BE AVOIDED

PART B (RESEARCH AND ANALYSIS)

• WHAT TYPES OF ANALYSIS CAN BE USED TO MONITOR MARKET AND TRADE PSYCHOLOGY AND WHY? IDENTIFY THE DIFFERENCE BETWEEN
  TRADE AND MARKET PSYCHOLOGY?

• HOW CAN YOU MEASURE MARKET PSYCHOLOGY USING CRYPTO-CHART? SELECT FIVE TRADING BIASES AND EXPLAIN WITH CRYPTO-CURRENCIES CHART ON HOW THOSE BIASES CAN CAUSE COINS TO BE OVERSOLD OR OVERBOUGHT?

• IN YOUR OWN WORDS, DEFINE THE TERM EFFICIENT MARKET HYPOTHESIS (EMH). LIST AND EXPLAIN THE ADVANTAGES AND DISADVANTAGES OF EFFICIENT MARKET HYPOTHESIS (EMH)?

THE CASE STUDY GIVEN IS THE EXAMPLE OF WHAT TYPE OF PSYCHOLOGY? EXPLAIN THE REASON FOR YOUR ANSWER

However the case study of Jane is very common and rampant. This scenario have cause a lot of emotional trauma to those traders and affect their financial strength too.

This case of study belongs to the TRADE PSYCHOLOGY and it's personal. It can happen to everyone that's not Technical sound. Trade psychology is the mental state of the trader when making financial decisions. In this case study, The emotional, thinking abilities of the individual dictate how she makes her decisions like panic selling because it touch the stop loss level.

REASONS FOR MY ANSWER

The case study of Jane is comes purely from her emotional feelings towards the trade. Her mindset is being influenced by thinking abilities. Not based on any tangible Technical analysis.

She even questioned the stop loss level set by her. Stop loss level can be flexible and a yardstick to make decisions but does not make those decisions for us. With it, one can decides on what best to do. It's a great Strategy but it uses depends on us technically and the loss or profits incurred personally.

Our trading decisions should be Technically or fundamentally based. Far from our emotions so as not to be affected health-wise.

USE THE CASE STUDY GIVEN, STATE THREE BIASES THAT INFLUENCES JANE'S TRADING BEHAVIOR AND WITH EXAMPLES ON HOW IT AFFECTED HER BEHAVIOR?

There are a lot of biases that can lead to this ugly situation of the case study. These errors, if not checkmated, can lead to many losses as the case study shows. There are three main biases that can be noticable in her trade behaviors. They includes:

• DISPOSITION BIASES

This is the most appropriate biases that influenced her emotional state. It is also called LOSS AVERSION BIAS which comes from poor investment policies.

She makes poor investment. Based on the financial signals from her friends, her buying order supposed to be placed when the price at $9 initially which is a bit lower than when she placed it at $15. Her first mistakes.

• EMOTIONAL BIASES

This is the major biases that influenced the trade behaviors of most traders even experienced ones. Jane makes a lot of decisions based on how she feels at a momentarily.

• FEAR.
  She was afraid and that leads her into panic selling immediately her investment touched the stop loss level. She became afraid as the price keep crashing downward.

• HOPE

She was hopeful of positive outcome from the investment but keep getting disappointed. Be hopeful makes her to checking her assets often.

• REGRET
  Her initial emotional state was regret . Thinking that she supposed to have make more profits if only she placed the buying order at $9 Accordingly to the friend's signal with huge capital forgetting the gain of $5 as the price appreciated at $20 after few days.

• SELF-ATTRIBUTION BIASES

This is a kind of errors that's occur as a result of personal mistakes or overlook. Jane's mistakes contribute to her painful situations in the case study and it affects her emotionally and financially. She did not cash-out in the slightly appreciated price level, she keep holding the coin as the price keep depreciating and fail to keep holding onto the coin at it's reversal.

LIST AND EXPLAIN HOW THE THREE BIASES MENTIONED CAN BE AVOIDED

Biases can be avoided. Whenever it is done. Positive trade behaviors can be achieved. Healthful Trading psychology bring about profit maximization and reduction of losses. There are two basic ways of biases avoidance. They Includes:

• TECHNICAL ANALYSIS

All our decisions should be based on careful studies of the market trends. An accurate studies of market trends and cycles reveals the price movements, the uptrends, downtrend, support and resistance levels. With a good knowledge, one can know when to place buying and selling orders. Panic selling and buying, oversold and overbought of coins can be eliminated too. Our emotional state will be checkmated with accurate knowledge of the market.

• FUNDAMENTAL STUDIES.

Whenever a trader want to make a trading policies like the ones of Jane's in the cases. One have to study that particular coin fundamentally. This strategy involves the careful understanding of the whitepapers and mechanism of trade of the coin. Look at at it's market ranking, prices, market capitalization and circulation in supply. With this accurate clues, one can make financial decisions that's devoid of biases.

WHAT TYPES OF ANALYSIS CAN BE USED TO MONITOR MARKET AND TRADE PSYCHOLOGY AND WHY? IDENTIFY THE DIFFERENCE BETWEEN TRADE AND MARKET PSYCHOLOGY?

Market psychology is the sum total of the individual's behavior in the market setting. It can be noticed and evidently when the prices fluctuates and several stages of the trade like the bearish or bullish situations are as a result of general behavior of the traders.

If the market psychology is fully understood, there will be a profit maximization. But, failure to understand how every traders behaves at a point in time in the market will result in loss as one will be tempted to behave like them.

There are two basic ways of analysis. But the best approach remains the TECHNICAL ANALYSIS which will give more clues than the fundnmental analysis which is more superficially.

Technical analysis deals on charts of various kinds of the trade. There are many strategies like RSI, MACD, BOLL AND MS etc can be employed on the studies to help to forecast and predict the price of the coins.

Accurate knowledge of the price mechanism helps to know the nature of the market trends and when best to place buy and sell orders. Which are the two best functions of the trade.

• THE DIFFERENCE BETWEEN
  TRADE AND MARKET PSYCHOLOGY

TRADE PSYCHOLOGY	MARKET PSYCHOLOGY
It's the personal behavior of a trader	the general overview of the behaviors of the traders
It's changes abruptly on the individual's choice and emotional state	it changes momentarily based on the general emotional state.
It leads to rush decisions	it leads to market instabilities

HOW CAN YOU MEASURE MARKET PSYCHOLOGY USING CRYPTO-CHART? SELECT FIVE TRADING BIASES AND EXPLAIN WITH CRYPTO-CURRENCIES CHART ON HOW THOSE BIASES CAN CAUSE COINS TO BE OVERSOLD OR OVERBOUGHT?

Like the chart above. A good studies of this chart technically can be helpful to measure the general emotional state of the traders in any given market. With this chart, there are five stages with identifiable general emotional state. There are:

1 INITIAL STAGE

This stage the prices fluctuates horizontally because of everyone is buying and selling their coins at slightly appreciated and depreciated price level. There's stability at this point because every trader buys and sells at a very volumes. There's no panic and anything emotional surge at this point.

2 UPWARD DEPRECIATED STAGE

This is the second stage. It happens the uptrends stage but there's a gap or depreciated points due to abruptly fall in price of the coin in the market. At there is change in the general emotional state of trader in that many are buying large volumes of the coins based on greed mostly leading to uptrends stage but at this stage, majority of them decides to sell to make instant profits. This instant profits draw down the increasing price of the coin.

3 UPTRENDS STAGE

Here, there's an increase in the price as a result of bullish situation. Market psychology on this stage is buying. Many of them are hopeful too that the price will keep appreciating. Everyone is a buyer now. There's panic buying with high expectations of selling at exorbitant prices.

4 DISTRIBUTION STAGE

At this stage, the general emotional state of the trader is selling and buying at little volumes at this high prices. There's a slightly movements of the price. There's a little stability of price.

5 DOWNTREND STAGE

These is bearish movements of the price in the market due to the panic selling of the coins at this stage. The prices keep declining and more panic and emotional trauma will be experienced by majority of the traders.

• SELECT FIVE TRADING BIASES AND EXPLAIN WITH CRYPTO-CURRENCIES CHART ON HOW THOSE BIASES CAN CAUSE COINS TO BE OVERSOLD OR OVERBOUGHT.

Overbought and oversold of coins are two extremes that exists in the market. Overbought occurs when a trader bought coins at higher price more than usual price while oversold is when a trader sold his coin at very cheapest price below the usual price. These biases can lead to that.

• Emotional biases.

Be hopeful and greed can make a trader to overbought a coin while fear can lead to oversold.

• Disposition biases

Poor investment strategies can lead to both overbought and oversold signals in the market.

• Mental Accounting biases

Governmental influences can affect the prices of the coins leading to poor financial decisions. This poor decisions can result to oversold and overbought of coin.

• CONFIRMATIONS BIASES

A trader can make a gross mistakes on the ascertain the current market value and transactions. With this view, a trader can overbought or oversold a coin.

• SELF-ATTRIBUTION BIASES

Over self confidence can clouds one's good financial decisions. It always affects the market to be extent of buying and selling of coin more or less than usual prices.

IN YOUR OWN WORDS, DEFINE THE TERM EFFICIENT MARKET HYPOTHESIS (EMH). LIST AND EXPLAIN THE ADVANTAGES AND DISADVANTAGES OF EFFICIENT MARKET HYPOTHESIS (EMH)?

EFFICIENT MARKET HYPOTHESIS also known as the efficient market study comprises the application of the essence of the fundamental Studies of the coins and the Technical analysis of the said coin to predict the new market trends that will be experienced in the market.

Efficient market study focused mostly on risk assessment of the market trends to ascertain the particular coins with higher investment rate. With this study, the risks are known and avoided to possible best to make high profits.

This ideas related closer to the conceptual economic Strategies of Bachellier , Mendalbrot, Samuelson and Eugene Fama which postulated an idea of great returns based on high risk assessments of coins.

• ADVANTAGES AND DISADVANTAGES OF EMH

• To invest on CRYPTOS with higher financial returns

• To conduct the risk assessment of various investment opportunities.

• To ascertain the current market status of the coins

• High profit maximization of the coins.

• DISADVANTAGES

• it's very Technical. Not easy for amateurs.

• Without careful understanding of the strategy, it always result to high loss since it out deals with coins of high risks.

• the volatility nature of the market can affect the study leading to opposite of the positive side of the study.

CONCLUSION

Trade psychology of an individual affects his/her trading behaviors and upset the general psychology of the market. With accurate knowledge, a healthful Trading attitude can be encouraged.

Biases are numerous and it's affects the mindset of the trader thereby influencing his/her financial decisions.