Steemit Crypto Academy - Season 2, Week 4} Don't get lost in the fuzz - by Prof @fendit // Homework done by @xkool24

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? What would you do now? Explain in detail if there's something you would do differently.

Firstly, with a full knowledge of my risk aversion level and my risk level stake for the day, I should be able to deal with this scenario. As a moderate aversion risk taker and mid-long term investor (who wouldn't want to just buy in and cash out the next minute), I already know that such dips are sure to occur. Therefore, this would be my action before going through this Lecture.

MY DECISIONS BEFORE

I would HODL, I don't need to make any hasty decision that would cause more losses along the line. I already had a buy-in figure of 62k USDT and price is currently valued at 54k USD which is less 8k USDT value lost or 13% asset value lost. This lost value is still less my risk level take for the day which is pegged at 25%. So, I think I'm still good and nothing to panic about, given that market trend would always reverse and correct itself. Bitcoin is a great coin and had always shown strength in re-bounce each time there are bearish trends.

Key note: Money invested in Bitcoin is/are not lost despite the bearish trends seen. It is only lost when exit positions are made from the investment. TIME is the only price to pay for another bullish trend to correct the dip, given that I am already prepared for a mid-long term investment in the invested coin. So For me, the only option is to WAIT for that bullish move. HODL, the price would definitely come back with profits.

MY DECISION AFTER

My decisions after the lectures would be a double edge sword. I would still maintain my position as earlier communicated above OR use the STOP LOSS tool. I don't need to loose a certain weighty percentage before making any hasty or corrective decisions. My Stop Loss tool should be placed in such a way it triggers off as soon as market trends to dip.

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.

MY PERSONAL EXPERIENCE (MISTAKES) IN TRADING

The experience I'm about to share with us what happend some couple of years back, precisely in 2014. My friend and I got introduced and engaged to Binary Trading, a sub-arm of the Forex market trading. It was not an easy end but the beginning looked quite rosy. After listening to the profit story and evidence to show for it, we invested $500 (2014) and got started. Fortunately for use, though we still had a tutor who guided us through the market trends (since we're newbies) and collectively built this $500 to a whopping $5000 in less than 7days of trade (which was 9x the value invested).

But, we started imploring emotions and greed during trade. All In a quest to get this value doubled within the next additional 7days, we started loosing staked trades until we landed at $1000 asset value. So many factors played out in this loss factor. We were trading with revenge because we needed to recover lost trades, we also traded with greed by placing much higher value stakes to get to set target. Hence we lost more of what was we anticipated.

After a while, we naturally placed ourselves on a stop loss order, and withdrew 50% of the available fund in the wallet account ($500) and the rest was now stories.

LESSONS LEARNT

• Trading with emotions should be avoided and also be in check. This most times causes more harm than good for us. It brings about trading with revenge in a manner that looked as if we had all the powers then to recover lost assets. Staying focus during trading Should be encouraged at all times.
• Overtrading. Due to the quest to recover lost grounds and also double up asset value, I engaged in this act which was also not good for trading. This act creates more exposure to the volatile market, hence assets are lost.
• We should always outline all necessary requirements needed before going into trading proper. These would help position the trader for better buy in and exit all geared towards profiteering.

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

Two things were very helpful and impactful from the class. They are:

• Overtrading: this does not only exposes the trader to market volatility but also brings fatigue which affects ones emotional status. Assets are lost, Fiat gone south when we get involved in Overtrading vis-a-vis emotional play when we get involved.
• Revenge Trading: Just like I narrated my ordeal with the Binary Trading, revenge trading was one of the drawbacks that helped in giving me more dips. The more I thrived to win back, the more assets that were lost. It is necessary for us to know when to exit the trade and take a break. This does not only give us less exposure to trade volatility, but also help calm our emotions before re-engaging the trade.

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.

I will want to make a point before answering this question my Prof @fendit. The same man bought some Good number of Bitcoins couple of months back and the price of bitcoin was seen to go bullish. But funnily, the price of Bitcoin also went Bearish sometime last month (April'21).

I have a unilateral decision on this matter both on before and after approaches.

MY REACTION BEFORE & AFTER

Seeing this kind of news which is a sentimental approach to trade should not only be my basis for engaging the trade. Sentimental approaches are usually temporary compared to other analytical approaches like the technical and fundamental analysis. I may not be in a haste given to my stands of not always sure of engaging the trade in a short term bases.

Secondly, I may not be financially liquid to buy-in into a big asset like Bitcoin untimely given to its large investment value. If extra ordinary measures are taken to acquire this asset and it later goes Bearish, would I be in a position to still pay the price of HODL before refunds are made? Difficult!!!

Then lastly, If I've decided to wear the cloth of a short term investor who's aim is to make quick profits from price changes, I think I would invest a fraction of my asset into this cash cow rush and then take advantage of this short term price changes. This may also be supported with the STOP LOSS tool to avoid any form losses from this venture.

In conclusion, I will say this common mistakes are the obvious that happens to most newbies in the trade and hence, this is a veritable platform to learn how to advert this common mistakes.

This is my entry...Thank you Prof @fendit.

#cryptoacademy#fendit-s2week4#trading#nigeria