The herd mentality, according to Oxford dictionary, is defined as: The tendency for people's behavior or beliefs to conform to those of the group to which they belong. This is applicable in all aspects of life and is especially apparent in groups of people with a purpose. Investors also fall into this mindset often, hence why I created a bullsvsbears steemit account that focuses on practicing objective analysis with bullish or bearish momentum. I seem to find that objective analysis is the most effective way to develop a mindset opposite of the herd mentality.
So what, you're calling everyone stupid?
Now, I am going to speak on the markets first, then more directly about life. To start, I just want to say that I'm not calling anyone stupid. Just simply stating that the herd mentality is more of just knowing what other people are doing. When humans join a group and are associated for even just a short period of time, they change. They conform to the group's behaviors, resulting in a phenomenon called groupthink. This psychological event is what causes herd mentality.
When it comes to trading and investing, the herd mentality are the emotions that you feel. The panic, euphoria, mania and depression are all considered herd mentality emotions. You ever heard of that dumb old saying that 90% of traders lose money and you're just like nah my ego won't let that be me. Well guess what, if you are a victim to your emotions, you are a part of the herd. Welcome to the club, we've all been there at least once.
The point here is that in order to not be in that 90% as a trader/investor you have to consciously agree to go against the herd mentality. While it is not an easy task to control the emotions of life and human experience, it is critical to your development as a trader and person. After consciously agreeing to control your emotions and taking control of your brain rather than it controlling you, it becomes easy to analyze any market extremely objectively. This is a huge advantage in any market, even crypto.
I'd confidently say that 80% of crypto traders do not know how to control their emotions and lose a lot of money in their first month trading(especially using leverage). What happens next is the use of risk management strategies. However, when you are filled with an inflated ego and think you are an exception to using a stop loss, you get rekt. Or maybe your risk management requires not using a stop, just small position sizing and adopting the "hodl" mentality while averaging down and up into your trades(scaling in and out of trades is an effective strategy). The point is, risk management will protect you from any emotion, kind of like a next life type deal. Get to keep your account balance above 0 and another day alive, conserving your money and staying around for another day closer to a more profitable move.
Each trade you are betting your money. Its no joke. You throwing down on trades.
Are you paying attention?
figure it out
"wow thats me"
"lmao i see 2 trades"
“If everyone is thinking alike, then somebody isn't thinking.”
― George S. Patton Jr.
Think for yourself
This idea isn't solely applicable to markets. And yes I threw that quote in up there. There is a moment when you have the realization. The moment you start to think for yourself, and feel more liberated than ever. You realize that so much of your schema of life, which has been developing for years now, is a product of the herd mentality and groupthink. First your parents engrained ideas into your mind, then it was your friends. It slowly shifts to the people you spend the most time with as we oddly adopt their nuances and behavior such as common language/slang. Its a really extraordinary concept how humans pick up so much of their own behavior from others.
Develop your own beliefs and be open to challenges. However, with this being said, the idea is not just to have your own views but to be skeptical. Question the hell out of things you hear that make you wonder why Tai Lopez just yelled "hodl" on live TV. As humans we naturally believe most of what we hear, because we think that the person who cares enough to say it, is telling the truth without exterior motive.
The issue is that people sometimes either 1. have no idea what they are talking about or 2. are just straight up lying. Yeah, this is a negative outlook on human behavior but I am cautious. Internally, I question everything I hear from others making a note to check that out later tonight because is Elon Musk really going to Neptune? Maybe Mars though.
That's my rant for today ^
I sometimes get off topic in my writing, the brain just goes haywire sometimes. Its interesting to write to say the least. I think it helps me form a perspective. Anyways, I've got to inform you of some interesting price action in the crypto markets. Alt/btc pairs are consolidating and not reacting too bearish even though bitcoin is falling hard. Its interesting, but thats all I'm saying. #DYOR is my favorite thing about blockchain and crypto because it applies to most things in life as well. It's a saying that is critical to fighting against the herd mentality.
If you have criticism or a compliment, comment. I just don't want to see the basic "Good article! I like it"
You feel me? Listen up
Steemit isn't going anywhere with that kind of engagement within the community. C'mon guys, think bigger here. If we make this platform an actual better place to be than Quora, Medium and other social media sites we will reap much better benefits long term. Think big. Goodnight.
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