Crypto Academy Season 2 Week 4 Homework Task for @fendi

Another wonderful lesson by professor @fendit. "Don't get lost in the fuzz" is so easy to speak with the mouth but is difficult to follow in actual reality because we are human.

I'll be answering the given questions as this:

(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?

Because I know that the market for these cryptocurrencies like Bitcoin is very volatile, I would HODL. It's not the first time Bitcoin is experiencing a steep dip and it won't be the last.

At some point I may decide to sell my position and buy a position in another market that looks promising. I'll take profit from the other market and buy back a position in the Bitcoin market.

But the question is; "all things not being equal, what would I do?". Let's take a scenario: after I sell my position in the Bitcoin market and buy into another market ( let's say ADA ), the ADA market becomes bearish while the Bitcoin market begins to flourish. I would not only make a loss but I would be in deep trouble.

To HODL would be my action, then as the market flourishes, I would sell and make a gain.

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What would you do now?

I would utilize the stop loss order to minimize loss. HODLing is not guaranteed because I can't tell how long the dip would last.

(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?

source

I've always know myself to be an impulsive person, letting my emotions cloud my decisions. My greatest mistake has always been trading with emotions. It has happened so many times. I buy a position in a market and suddenly the market experiences a dip.

I immediately feel that the universe is against me. The dip would happen for a few days. During this dip, I usually sell at a low price in fear of the price dropping even lower, forgetting that these things are normal. A few moments after I sell, the market becomes bullish. Nothing can describe that feeling of anger and disappointment.

From the experience, I learned that you should always think twice before making an impulsive decision. The decisions I've made have led me to more losses because I felt overwhelmed to make them.

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

"Do not let your emotions control you"

This is one of the major things newbies fail to realize. The market isn't going the way you expected it to and all of a sudden, sadness comes knocking, anger comes in, maybe depression. It is advisable not to make any decision if you feel your emotions taking over. I learned that the hard way.

Also, "Utilizing the Stop Loss". You may be watching the chart all day and it's been a good market, but you never know what would happen in split seconds. You may take your eyes away for a few moments and the market comes crashing. Sometimes it happens when you're asleep, sometimes it happen so fast right before your eyes that you won't be able to quickly exit the market. Setting a stop loss for unpredictable situations is very important especially when you're unsure of what to do in order to minimize any possible loss.

(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."

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source

What would you have done before reading this class?

If I don't own any Bitcoin, I would rush to buy the coin because of its rising popularity and value. I wouldn't want to miss out so I'd buy in hopes of HODLing, expecting the price to always rise.

If I already own Bitcoin, I would still keep it with the hopes of it reaching higher price values.

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What would you do now?

Now that I've read this class and gotten some experience in trading, I would watch the bull run for a while and take profit at a desired point. Because these bull runs don't last, I'll wait till the market experiences a significant dip before buying a position again. The goal has been achieved; make profit.

Conclusion

Trading may seem very difficult at first but it is really easy if you have the right orientation and a mix of sweet and bitter experiences. I think the most important lesson is to not trade with emotions. Trading can be the beginning and end of a man. It could be neither, it could be both.