“Take profit”, “stop loss”; one sounds great, the other is more or less an unfortunate show of submission to the harsh tides of the crypto space. Whichever one comes your way, you feel a drive to sell all or at least some of your crypto portfolio. Letting go of your investments is always a dilemma, but here, you’ve given in to the vibes of selling off, either to evade some disaster or to leave the ship while it still looks good.
The crypto space is a very dynamic zone with only little impossibilities and endless possibilities, especially when it comes to price movements. Several attempts a predicting price movement goes wrong and for a cryptocurrency investor, ‘luck rules’.
These price movements on the other hand triggers emotions from both long term and short-term investors, while long term investors seem to be more in control of their emotions when it comes to reactions to price movements, fact remains that they feel an equal urge to react to it. Sometimes they win, other times, situation prevails and they sell off (or a part) to prevent further loses or take already made profits.
Having sold, investors still tend to check on these former investments to see if they had made the right choice; sometimes they do, but when the reverse is the case, another cascade of reactions ensues. “I should have waited a little longer!”
When this happens, these investments have either gone further to make more significant gains or have flipped over its losses and is making gains. Situations like this stress the need for patience in cryptocurrency trading, and even other investments outside cryptocurrency.
Just as the saying goes, ‘the market is a tool to take money from the impatient and give it to the patient’. I’d say this is not absolute however as some ‘fast moves’ turns out to be a swift masterclass while some act of patience has not only gone unrewarded, but also adverse…but that’s why the statement of risk exist.
However, being a good investor also involves trusting the choices you make and staying in control during the tides, especially where there exist possibilities of things going the other way.
‘Buy the dip’ could be one of the toughest advice you could get, because for normal investors, it is more reasonable to get greedy when others are getting greedy and staying fearful while others do the same. But the crowd doesn’t always get it right. Several attempts at following the footsteps of others in reacting to price movements have been fatal…sometimes.
It is already a common event for price crashes to follow sudden price hikes, ‘pump’ they call it, but I prefer to call it a ‘pulse jerk’. Events as such have created many ‘bag holders’ who bought at the top hoping things continues go green. But after the greens comes the red. Patience is important here! We tend to ignore it, but it always comes barking at us…our investments actually.
To correct the former notion; ‘stay fearful when others are getting greedy and get greedy where others are fearful’, this doesn’t always turn out good, but at least most times it does. Look out for the reds and the greens too, but with each case, endeavour to do your own research and see the sense in ‘exercising patience’. It’s hard to do this with the kind of pulse cryptocurrency price movements bring. A good investor is always in control of this reaction, well planned moves stands more chances of turning out right, and it takes patience to plan.
Before you dump those bags, it’s advisable to think again or at least wait a little, especially when you are ‘stopping’ your loss. Sometimes the reds are just a scare strategy, where prices losses are not backed by tangible events, it might be of benefit to ‘wait and check’. In the end, the unpredictability of the cryptocurrency space prevails.