The Emotional Trader
The Emotional Trader will have a very difficult time Trading, especially when they are losing. In fact, emotional Traders don’t really have much longevity in any market at all. They trade long enough to make a few good plays and then spend the rest of their days giving it all back. It’s a vicious cycle and it’s why we teach Traders to be as unemotional as possible. This is where Strategies come in but that is a story for another day.
Today we will talk a bit about the Bitcoin Daily candle that just saw $58,100 – a 13% drop from the ATH posted a week ago today. We won’t get into all the details about Support etc – that can be found in a blog from last night – here.
Blood In The Streets
Fortunes are made from opportunity. To be more specific, fortunes are made from opportunities that the majority shy away from. When everyone is selling, creating a bloodbath at your feet, YOU are the only one buying. Why is that? It’s not because you see something they don’t but it’s that you have accessed the situation and you feel that whatever you are buying is undervalued. Therefore, you feel like you are getting a discount.
This is where Investing comes into place. With Investors, you have two types when they face a drop in the market. The first type is the most common type – this type is called the Paper Hands Investor. The second type is less common and they are called the Diamond Hand Holders. What does any of this mean?
Simples – the Paper Hands will fold at the first site of a shake-out. They are scared. They bought for the wrong reasons and they have no plan or exit strategy at all. These are the emotional traders who look at their account value 60 times a minute. It is not hard to scare these investors into selling.
Diamond Hands on the other hand…(you see that) these Investors have a plan and they won’t be shaken out by a 10, 20, 30, or even a 40% drop. Some of these investors even held through 80% drops – multiple times over the last few years.
My point is this: When analyzing the markets, always ask yourself WHO is benefiting the most from these moves and what plan might they have in order to profit from it. Shale-Outs are designed to provide liquidity by forcing Traders to close their positions and allowing the whales to gobble that fresh liquidity up.
Understand the difference between Paper and Diamon Hands and for the love of all – Use A Strategy and Have a Plan for every position you have. This market can move very quickly and sometimes you can be spread across 6 different exchanges, yield farms, NFTs, staking pools, etc. It is important to know what you need to do when the time is right.
Alts Worth Watching
Once upon a time, there was a very special dog. That dog was a shiba inu, and this dog inspired millions of people around the world to invest money into tokens with the dog’s image on it.
According to the SHIBA INU website, SHIB is the “DOGECOIN KILLER” and will be listed on their own ShibaSwap, a decentralized exchange.
Shiba Inu coin was created anonymously in August 2020 under the pseudonym “Ryoshi.” The meme coin quickly gained speed and value as a community of investors was drawn in by the cute charm of the coin paired with headlines and Tweets from personalities like Elon Musk and Vitalik Buterin.
The 1inch Network unites decentralized protocols whose synergy enables the most lucrative, fastest, and protected operations in the DeFi space.
The 1inch Network’s first protocol is a decentralized exchange (DEX) aggregator solution that searches deals across multiple liquidity sources, offering users better rates than any individual exchange. The 1inch Aggregation Protocol incorporates the Pathfinder algorithm for finding the best paths across over 60+ liquidity sources on Ethereum, 30+ liquidity sources on Binance Smart Chain, 30+ liquidity sources on Polygon, Optimistic Ethereum, and Arbitrum. In just over two years of operation, the 1inch Aggregation Protocol surpassed $80 bln in overall trading volume on the Ethereum network alone.
The 1inch Liquidity Protocol is a next-generation automated market maker (AMM) that protects users from front-running attacks and offers attractive opportunities to liquidity providers.
SHIB came straight into our resistance Zone and is sitting there again just in case you weren’t able to sell the first time. SHIB has gone 67% from our Reload Zone and now has completely crushed its previous ATH.
There is a chance we come back to the 45s but we need to see how well this resistance will hold. We are in Price Discovery, so we don’t exactly have any prior history trading at these levels to say how well price can respond. We do have another Resistance Level at $0.00007750 as well as $0.00008276 but we really want to see this $0.00005900 area get flipped into Support.
1INCH is another one we have already talked about. Just today alone, 1INCH put up a 97% candle which did indeed hit our resistance zone at $7.50.
The selloff so far has been fairly dramatic and now we need to see how this settles out. If we are able to continue to add volume and momentum then we can entertain the thought of reloading when the time is right.