The Human Mind
Unfortunately, the human mind is inherently opposed to the investor mindset. The two are at enmity with one another. An untrained mind that chooses to become involved with investments can only last so long. If the market turns against such an investor, they consider exiting the market and calling it a day. Reasoning that it wasn’t for them, or that it is simply a waste of time.
However, recent price action within the Crypto market has revealed how markets seem to exhaust investors almost perfectly. If making any investment was a given certainty, everyone would become dedicated investors. However, it is this very aspect that manages to discourage the majority. Uncertainty can be equated with a “window of opportunity”. Once an investment becomes a “sure thing” life-changing gains have already been made.
Uncertainty that is complimented by additional fundamental dynamics can create an opportunity that carries a high probability of success. These dynamics often change from cycle to cycle, and identifying future trends and events can be very effective in isolating current “uncertainty” which has a high probability of future success. Most new investors are essentially looking for a level of certainty.
However, this is not really the approach that secures the gains that matter. This is the approach often taken by a very conservative fund manager. The returns on such an investment are essentially at the very bottom of the spectrum. This is primarily due to the risk profile being extremely low. As certainty increases, the risk decreases, and with it the potential gains. Simply diving into a risky investment isn’t the solution either.
Investment is like a puzzle that is made up of numerous “pieces” or dynamics that ultimately provide a high probability of success. I have noted how many noobs often manage to “get hold” of a single piece of the puzzle, believing it to be the golden thread that will eventually secure future success. However, a puzzle is made up of more than one piece, and while you may be holding an “authentic” piece of the puzzle, it is powerless in isolation.
It’s funny how confluence always manages to emerge within the world of investments. Confirmation is imperative, whether it be for trading, investing, or identifying income-generating opportunities. The puzzle always needs to be completed, in order to see the “image of probability”. The term FUD (fear, uncertainty & doubt) incorporates the element of uncertainty. Historically, entering the market when the fear and greed index is at extreme fear, and simultaneously great uncertainty is generally a good move.
Uncertainty has a way of flushing out a certain type of investor. This often has a way of creating tremendous opportunities. This is yet another “short-term” example of how uncertainty is often at the heart of a good entry, or investment. However, as mentioned earlier, simply acting on this aspect, void of the appropriate puzzle pieces doesn’t work either.
The aspect of uncertainty will often scare many investors away. However, if you have managed to get a hold of the puzzle pieces, you are in a “privileged” position to be able to see the “picture of probability”. Making investment decisions with this in your favor can provide you with a tremendous edge, and ultimately secure future success.
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.