I made a post regarding my goals a couple of days back. I target to increase my Hive Power and my HBD in savings. It was very interesting to see in the comment section how many people wondered why I wasn't using my HBD to purchase Hive and then sell it when Hive goes back up. I don't do it because I learned the hard way that trading bothers me too much.
Learning the hard way in my youth
About 25 years ago, I was working for a Swiss Bank and I was a specialist for small company credits. I checked their numbers and decided whether they could get loans or not. In my spare time, I was trading on the stock markets. I was working with options and warrants and I have to say that it kind of drove me crazy.
When trading there is always your ego standing in the way and it was the same for me. I had my strategy that if a title I bought went 10% below buying price, I would sell it and I would double my position if the title went 10% up. These goals were great but it was so difficult to implement them. At the time, there were very few options to actually automatize the trading. Especially with options, even stop losses and limit orders didn't always work because there are market makers that might simply jump your orders. It meant that when I was trading, I had to be in front of the screen at all times and I always tried to close my position before the trading ended for the day. Even if I wasn't using big sums, a bad trade was enough to turn my mood south for the rest of the day.
As I said before, keeping my strategy was wishful thinking because it went against human psychology as trading goes in general. What happens when your position decreases by 10%? Your psychology wants you to keep it and hope that it goes back up. If it goes 10% over buying price, you just want to sell to realize a profit. However, I know that this wouldn't work in the long run and therefore I started to think that I knew better and I could just do as I felt and still make a profit. That's what I would call the ego trap which is very difficult to avoid. I probably had a positive trading balance at that time but the profits were never compensating for the stress and mood swings that the trading activity generated. It made me feel bad and I decided one day to change my strategy altogether. I stopped trading and decided to invest my money in dividend stocks. I bought the stocks and simply collected dividends over the years. That's also what I'm doing with crypto. I try to invest wherever I can get a return and I simply leave it there.
The hard truth about trading
For me trading is nothing else than a game of probabilities. At whatever moment in time a title has a 50% probability to go the way you want and a 50% probability to go the other way. You might get a little edge with chart analysis. So it's a game of luck and your biggest enemy is your own behavior and your ego. Both work against you and I believe that in the end they are not stronger than a possible edge that you would get from chart analysis. Then trading is not totally free. You have to pay fees in most of the cases to trade. This means that with a 50% probability of being right, you actually have less than 50% of generating a profit. Without a fully automated trading that takes the ego and the psychology out of the picture, trading is a losing game. I would say that you have the same probability to win as if playing the roulette in a casino.
Mixing up long term and short term strategies
If you trade it actually doesn't matter at all with what share or titles you trade. Your only aim is to sell higher than you bought. A lot of people are very much influenced by what they read and what they hear and they invest into something because they believe in it. However, with the first price drop, they will sell because they get scared. Markets always go up and down and they never go up in a straight line. So if you believe in something, make sure that you don't check the price every day. Just let it be and keep it in your wallet or your depot. If you believe in BTC, don't sell when prices drops below 50'000. Just keep them and don't beat yourself up about the price drop. If BTC is really as good as you believe, then it might go much higher.
Be it daytrading or long term strategies, I've learned that trading is bad for me and for my well being. So I simply stopped trading at all and I feel so much better. Of course, I still buy and sell stuff but it's not with the prospect to make a benefit from the transactions directly. I buy and sell because I have a long term strategy that aims to get as much return on my fortune as possible. If prices go up, of course I will be happy but if it goes down, I will still have the return from my investment in the form of interests and dividends and this makes me happy as well.
With @ph1102, I'm running the @liotes project.
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