Contrarian Or Realist?

Not Necessarily A Rule

It was not that long ago that market participants were extremely bullish regarding Bitcoin and the broader Crypto market. There were many calling for $30K and even $35K in the immediate short term. The general consensus was that Bitcoin would not revisit sub $20K again and that ultimately, we were heading higher. It’s easy now for everyone to acknowledge that this is not going to happen, especially after falling below $19K yet again. Analyzing and viewing data as a realist will often place you in the categorization of a contrarian. Some have gone as far as to say that if you want to succeed, simply do the opposite of what everyone else is doing. This may sound accurate in theory, but it’s unfortunately not that simple. Provided, of course, there is a case for having a contrarian viewpoint. Markets can be quite tricky at times, causing the obvious path ahead to appear not so obvious.

Correct Sequence Of Events

Do you want to know why so many investors are unable to be realistic regarding their expectations of the market? The short answer is that their sequence is inverted. The correct way to go about investing or trading is to conduct your research first. This includes technical analysis, on-chain analysis, and whatever other metric you wish to choose. Once you have built a solid case, you can consider opening your position. Many simply buy what looks appealing and then try to bend the metrics to affirm their decision. This happens all too often and is largely responsible for the delusion that so often sends market participants down the garden path. It’s a simple case of “first things first”.

Isolated Signals Are Deceiving

Just because one or two signals have flashed, indicating a certain outcome in the market, does not necessarily make it so. Trading without confluence is quite simply trading with the odds against you. As a trader, the most powerful stance you have is to have the odds in your favor. You cannot guarantee an outcome, but you can seek out confluence, which ultimately achieves the desired result. Do not make moves based on a single indicator or signal. If you are able to identify multiple signals and indicators that affirm the signal, you have managed to obtain confluence. In other words, everything is in tune. It’s similar to a band playing in tune, it sounds good. An isolated indicator is similar to a band with a well-tuned guitar, while every other instrument is seriously out of tune. The end product is quite simply a massive failure. The same fate awaits those who choose to base trades on one single indicator that supports their idea.

Learn The Disciplines

Trading is quite simply a practice that revolves around certain disciplines. Learning and applying these disciplines will ultimately increase your success rate. Those who are naturally disciplined obviously find trading a lot easier than those who are more emotionally inclined. The disciplined trader will often execute a trade that is contrary to the status quo. The reason, he is following disciplines, not emotions. Human nature is inherently emotional, and disciplined traders learn to keep emotions in check.

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