One of the number one hindrances to missing a great opportunity is fear. This is a two-edged sword. Fear to act in case you become a casualty, as well as fear of missing out and then acting too soon. To be honest, there is only one way to attempt to avoid this trap and that is to remain level-headed. Stay calm, resist FOMO and make decisions based on facts and technical analysis. Why do traders worth their salt gravitate towards technical analysis more than anything else? The simple answer is, that it works! TA is most often accurate when analyzed correctly. Yes, news events are the ultimate market mover but they are random and often occur without warning.
News events are at the top of the “power structure” and ultimately dictate what comes next to every other metric and indicator. The most bullish indicator means nothing in the face of an extremely negative news event and vice versa. One needs to “plan and engage” and then react if necessary. Not trading is also a trade provided it is warranted by analysis and not fear. Make a decision based on fear and nine times out of ten it is the wrong decision. Work and strategize within the framework of metrics and indicators but be continually mindful of the hierarchy structure.
One Of The Two
Either act fearlessly upon your strategy or wait boldly based on your analysis. As long as your actions are based on data and not fear then you can confidently await the outcome. I have more respect for a failed thesis than a lucky guess. A well-structured thesis has the odds in its favor, while a guess has no point of reference. There are those who will instantly understand what I am talking about here. Being able to constantly extract gains from this market relies on a lot more than luck.
The whales have in recent times upped their game in fooling retail via numerous deceptive moves that they know will be picked up on-chain. They utilize these deceptive moves to create “false signals”. A form of on-chain spoofing is becoming a lot more prevalent and will require additional research to debunk. The following excerpt is from an article I published in 2021.
Once the knowledgeable or insiders begin to see the behavior of the uneducated, they see opportunity. Whales begin to orchestrate plans that thrive on the uneducated or foolish. They feed off of their fear, their greed, and their lack of discipline and conviction.
With the transparency of on-chain data also comes the manipulation of it. It seems everything on this earth is manipulated or perverted in some way.
No Analysis = No Conviction
It requires a lot of conviction to exercise restraint, as well as staying power when everything is going against you. However, if you have put in the hours and found the confluence, you have no option but to respect your thesis. This is what is often required and if you are correct in your prediction, the darkest hour before the dawn. Eventually, the facade gives way and the underlying fundamentals destroy the FOMO, FUD, and whatever else has been driving the “false move”.
Extensive research provides confidence, which ultimately enables traders and investors to act and engage without fear. When you really break it all down, many of the casualties are due to FOMO or greed. Check yourself daily, your hard-earned money is on the line!