Investors and Greed...
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Hi friends! how are you doing? Welcome to my blog, it's super good to be back in your faces. I trust you got value from my last post. I bring to you another interesting content one that I believe you would find interesting as usual. In my last post, we explored the concept "Defi Degens", you can check out my blog to read through if you haven't.
Today, we would be looking at Investors and Greed in the crypto world... it's actually another topic of interest that I feel many can relate with. It's something very practical, I've personally had my share and am sure many of us here have equally had our share too with a lot of lessons learnt so far. Let's get into discuss guys.
Emotions in trading is something traders would have to battle and win. The trust is the market does not even understand your emotions, it doesn't even pull a string if you're crying the market should favour you, or anxious about the happenings in the market for even afraid to take a bold step into the market.
What we should substitute our emotional imbalances with is Discipline, this is the only time the market can respond positively to you. Trust me it takes a whole lot to get to this point of discipline. Many had got burnt many time before getting to this point, I mean they've had hard lesson before getting to resolve they must go the way of "discipline".
Today we want to talk about one of the most dangerous emotion in trading. It's no other than Greed itself. It's just so deadly and can be overwhelming. Now the question is, "is it the lot of every trader or there is actually a way out of those caught up in it web?. We would get to discuss all of this in this post.
A simple definition of greed is a selfish and uncontrolled/excessive desire for more...more than what is needed. You know at some point we all have been at this point. To be very honest with you, greed has made me blow my account on more than two occasions. I know if am to ask some of us reading this post, you would also have stories to share along this line.
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The question is, why does the profit made so far before losing all looks so little?... I mean we had a profit here and there but ignored until it was all gone. This is for a particular scenario. For another, I would like to ask, why did you increase the leverage so much that it chocked your liquidity and then eventually kicked out with losses? Here is just another scenarios.
The truth is, greed manifest in so many ways. Some would tell you they do not over leverage, yet they can't take out the seeming little profit and exit the market before it goes south. Is that not another kind of greed...lol. Another kind of greed can be seen in trader who now add more capital to their winning trades. That's greed in action, because at this point, you might have deviated from your original trading plan which is risky.
Like I mentioned earlier, greed is very dangerous. Someone said it's more dangerous than fear in that greed pushes you into the unintended which cost you more than you can bear while fear handicaps you, restricting you from taking certain action that would cost you your house...lols.
In other words, greed can make you blow your account and ruin your portfolio while fear keeps you from using the asset in your portfolio for your profiting but then the good thing is that, you still have it there in your portfolio, its not gone...let me tie it up with this saying that a Bird in hand, is better that a thousand in the bush... that's the case with fear and greed.
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Greed makes you act, irrationally...you do things out of the emotional impulses of the moment and like I earlier stated, the market do not respond to your imbalance emotions. You would get burnt and burnt again because of these greedy impulses. Greed would make you over leverage, over trade and make you want to catch up on any and every trend until you're caught up.
Friends, the good news is that greed can be overcome, it all boils down to discipline. Discipline in the area of having a Trading Plan and Trading Journal and then sticking to it. Let's take a deeper look friends.
• Trading Plan: Trading Plan are guides that informs our trading decision helping us know when to enter a trade, why we should take a trade and what type of trade to take. It also captures one's trading strategies and risk management. I mean how much risk a trader is willing to take on a particular trade.
With trading plan in place, there wouldn't be impulse trading because there is a plan to follow,one that must be strictly adhered to. Research has shown that traders who maintains a trading plans hardly falls into the web of irrational trading and greed...and most importantly, they turnout to be more successful trader than those who take impulse trading.
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• Trading Journal: A trading journal can simply be defined as a record book where you document your trading activities. It's not necessary a book, it could as well be a spreadsheet that capture the detail of your trading activities such as the time you took a trade, the reason for taking a trade, the leverage used, the outcome and more.
This will help keep you in check for subsequent trade and help you improve because it points out the flaws and success.
I believe by now we understand the negative impact of greed in the live of a trader and how to control it for profitable trading journey. Let's do well to avoid these irrational kind of trading and be disciplined. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.
Regards
@lhorgic♥️
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@jueco