Know When to Stop. Lesson for Everyone

[blazely]

The market can move quickly. As a result, we are often tempted to be reactionary. When you wake up in the morning and see the whole market bleeding red, investors have one of two instincts: BUY! or SELL! The reality is that the best response is often to turn off your computer, grab a cup of coffee, and go about your day. It is important that you learn to recognize the warning signs that you should stop and step back before making a decision.

Investing is a marathon, not a sprint. You will be invested in the market for many decades, and over those decades, you will see some very large swings.

If you ever find yourself rushing to buy or sell – Stop.

If you are disturbed when your spouse comes into the room and tries to talk to you because you are trying to figure out what you should do – Stop.

If you are worrying about whether or not making a buy or sell is a good idea – Stop.

If you find yourself getting overly emotional – Stop.

If the idea of your internet going out causes panic – Stop.

Your decisions should be made methodically. You should be able to pinpoint why you are buying a particular stock and why you are selling a particular stock. Understand the particular investment and how it fits into your overall strategy. Make your decisions in a principled manner based on your overall strategy.

Whenever you feel rushed and are making decisions without considering your strategy, stop and walk away; come back when you are able to think through your decisions in a principled manner.

Maybe you only need to step away for a coffee break, or maybe you need to leave for the whole day or even a week. Your portfolio will be there when you get back. You are not a day trader. You don't need to be clinging to every small swing the market makes. There is not a single day in the market where you have to be glued to your computer. There is not a single day in the market where you have to make a decision. You should never feel like you are racing.

One of the best parts of Dual Investment or even Smart Trend Strategy which I have used a couple of times, is that it is a strategy that doesn't require constant care and attention to your charts. You can set up your portfolio, then walk away and live your life, checking on your portfolio when it is convenient for you. Let your life dictate when you check on your portfolio; don't let the market dictate your life. There is nothing about the strategy that demands an immediate reaction to anything. Just because the market is moving quickly does not mean you need to join the herd running off the cliff. 

[MongiIG]

On 14/10/2023 at 18:37, blazely said:

The market can move quickly. As a result, we are often tempted to be reactionary.

Thank for sharing @blazely

All the best - MongiIG

[Bash4j]

Thanks for the remainder @blazely

Here is my take on 'Know when to Stop'

Cryptocurrency trading can be very rewarding, but also very risky. It is important to have a clear strategy and a good risk management plan before you start trading. Here are some tips that might help you:

- Avoid excessive leverage. Leverage is when you borrow money from a broker or an exchange like Bitget to increase your buying power and potential profits. However, leverage also increases your potential losses and can wipe out your account if the market moves against you. Use leverage sparingly and only if you are confident in your trade.

- Set stop loss and take profit orders. Stop loss orders are instructions to close your position automatically if the price reaches a certain level that indicates a loss. Take-profit orders are similar, but they close your position when the price reaches a certain level that indicates a profit. These orders can help you lock in your gains and limit your losses.

- Do your research. Before you invest in any cryptocurrency, you should learn as much as you can about it. Read the white paper, check the team, look at the market cap, the trading volume, the supply and demand, the technical analysis, the news and events, etc. Don't invest based on hype or FOMO (fear of missing out).

- Diversify your portfolio. Don't put all your eggs in one basket. Invest in different cryptocurrencies that have different use cases, features, and potential. This way, you can reduce your exposure to market volatility and benefit from multiple sources of growth.

- Know when to exit. Sometimes, it is better to cut your losses or take your profits than to hold on to a losing or winning trade for too long. Have a clear exit strategy and stick to it. Don't let your emotions get the best of you and cloud your judgment.