STEEMIT CRYPTO ACADEMY-SEASON2, WEEK 4 } DONT GET LOST IN THE FUZZ BY PROF @fendit// HOMEWORK DONE BY @kelvincole

Good day Everyone, it feels good to be back on this platform, and to attend to the home task given by Prof @fendit. It was a very refreshing lecture and i enjoyed every bit of it. It was very well simplified and educating too, especially for a young investor like me. Once again big Kudos to Prof @fendit for this opportunity.

A) BEFORE READING

I would have been very apprehensive,anxious,scared and most certainly fallen a victim of Over trading and Revenge Trading, because seeing that the price has dropped and probably because i invested when the value of BTC was high, with the mindset that the price will continue to go high,and not taking into consideration other factors like the Market trend,the price variation overtime,my risk aversion or how prepared i am to invest as well as my disposition towards a change in price, whether negative or positive, i definitely will be compelled to:

1. SELL: Out of fear and anxiety that there may be further drop in price of the BTC, i will certainly make up my mind to sell as fast as possible so as not to loss big. My decision to sell is basically because i was never prepared emotionally, psychologically and even mentally to invest at the beginning, i was only carried away by the excitement or fuzz of making more money if the price continue to grow.

2. Another action i would have taken, is Taking revenge of the trade by immediately investing in another asset that i perceived to be of good value at that point in time.The reason been that , in order for me to regain what i have lost after selling at a lower price, i needed to re invest in another Crypto asset perceived to have a high valuation, so that i can sell when the price is high to compensate for the loss or shortfall made in my first investment. By so doing, and not carefully analyzing the market trend or price variation as well as the demand and supply trend of this new crypto asset, i definitely may end up losing my investment again and probably repeating the mistake again and again.

3. Over trading: This decision may arise when i consider that since the price of the BTC has dropped, and selling off my investment at that particular point in time may result to huge loss for me, and as such, i decide not to sell but to wait and see if the price will go up, then i look for perhaps another Crypto asset that i consider profitable in the market. Desperate to compensate for the drop in price of BTC, and the perceived fear of a potential loss in investment even when my investment in BTC is still running, i will rush into investing in XRP, with the expectation that my investment may yield result and without carefully analysing the numbers,market trend and price variation of the new Crypto asset, but rather carried away by what i envisage to get from my investment in the future. This may probably be another huge mistake for me.

AFTER READING

After reading this educative piece, instead of being anxious and afraid, thereby making wrong decisions, i will take a break, stay calm and carefully analyze the options before me, which are:

1. What if the drop in price is another way or strategy by the 'whales' to buy at a lower price, considering that, out of fear and panic, some people may want to sell off. hence, taking this into consideration,i will rather stay calm and patient, retain the investment and observe the market trend instead of hurrying to sell.

2. Secondly, as a novice ( i.e before reading this course), i probably would have wanted to hurriedly re-invest in another Crypto asset out of desperation to safe/secure my initial investment, but as a well informed investor now,(after reading this piece)i will rather chose to wait and observe the market for some time,and if i have the desire to invest in another asset, i will carefully and meticulously analyze the new Crypto asset am investing in, by observing the market trend,its price variation, its demand and supply as well as its Resistance and Support level overtime, to know if it is the right time to invest.

3. As a conservative risk taker before my investment on BTC, and the fact that ab-nitio, i didn't take into consideration the important indices/derivatives before investing,but was carried away by the fuzz or excitement of a potential return on my investment, this lecture has made me more informed of what i should have done from the very beginning, which are : been conscious of the market am about to invest in,setting a stop limit, been confident and prepared emotionally, psychologically and mentally as well as actually been ready for whatever outcomes, whether positive or negative and knowing the appropriate time to invest through proper analysis of the technical factors of the particular asset am investing in.

B)

1. I have made several investment mistakes particularly in the retail buying and selling sector and not in the Cryptocurrencies Market sector, but i have a friend, who invested in Forex trade in 2017. He invested 1500 dollars trading on USD/CAN in a cross margin trade whereby six positions were opened.He made an entry position where USD/CAN was at its bearish level, hoping it will become bullish over a short period of time so he can sell and make profit.The trade was placed on a Friday,few hours to close of the market hoping that the trend will reverse once the market opens on a Monday morning. It didn't occur to him to put a stop loss while placing the trade on that fateful Friday.Getting to that Monday morning, he was preoccupied with a lot of work in his office, forgetting to open the trade to see the trend. In the Afternoon,when he finally had time to access the market and check the trend, he discovered that the trend has fallen further bearish, far below the level he came in. In short, he lost his investment because never had time to analyze the market trend and to know the right time to invest before investing.

1. The most useful strategy for me is Trading psychology strategy.

The reason is because no one knows us better than ourselves. As human Beings and a potential investor,we are fully aware of our personality makeup, are we impatient, emotional, erratic,anxious, over excited etc and how do we react or take important decisions when faced with obstacles or pressure.
It is important to analyze our disposition towards things and events, what actually propel/drive us into making wrong decisions, could it be fear, anxiety, desperation, over excitement or Greed etc. Been fully aware of who we are, our strength, flaws, inadequacies, attitude under pressure and how well we manage such flaws, and the positive attitude we develop thereafter, will go a along way to curtain some loss that we may encounter while investing in Cryptocurrencies.
For example, as a conservative Risk taker, am only ready to invest little even if my return on investment may be little too. This is so because fully aware of who i am and how i react under pressure, i may not want to bring unnecessary pressure upon myself by trying to heed the advice of others or been carried away my the fuzz of the market to invest more than i can actually do, thereby subjecting myself to regrets and anguish if things didn't go well.

Finally, understanding who you are and how well you can handle risk or pressure, will also determine how much you are ready to invest in the trade. By choosing to go small and not investing money you are not prepared to loss., or money meant for important project(school fees, health bills etc) in the future, will definitely safe you a lot of heartache. and if for any reason you decide to go big in your investment, it means you are prepared and ready to take whatever outcome that comes out of the investment.

C)

Before seeing this write up, i would have immediately invested in BTC or better still increase my investment in it. This is me acting on emotions, excitement, fear of missing out from the potential gains, born out of the fact that with Tesla recognizing Bitcoin as a means of payment, definitely the value of Botcoin will appreciate, and as a responds to the high value, the price will go high. This decision i may undertake without considering that as a result of too much pressure on supply, the price may drop especially when it has reached the Resistance level.

Reacting to the market now that i am well informed, i will definitely not rush to invest or increase my investment(that is if i have already invested), but will carefully analyze the technical derivatives of the asset like:

1. What is its current market trend
2. With the perceived increase in demand and supply, what pressure will it create in the market as well as how will such supply pressure affect pricing in the future.
3. If the price gets to the Resistance level, and starts dropping, what will happen.
4. The volatility of the market at present.

After considering the points stated above, next is consider:

1. What is my risk aversion
2. Is it actually the right time for me to invest or increase my investment, and what if the price drops just immediately i invest
3. Am i prepared psychologically, mentally and emotionally to invest or am i just carried away by the fuzz
4. Am i investing because of my fear of missing out (F.O.M.A), which in the long run may be my greatest undoing.
5. Is it safe for me to invest or am just taking a gamble, do i have enough fund to invest outside fund kept for important things like health and education.

All these factors put together, and carefully analyzed, will prompt me to take a decision to either invest or not to invest.

Thank You.