Don't Fall For It Again
It’s Coming
The process of a bear market is designed to shake out investors, as well as to lull them into a state of lethargy and hopelessness. This tends to occur, despite investors being emotionally and mentally prepared. Somehow, the bear has a way of exhausting even the most prepared.
This is why experienced market participants choose not only to prepare themselves emotionally but also technically and statistically. You can be emotionally prepared for a bear market, as well as a bull market, and still be shaken out. This is due to poor decisions and bad planning.
As I have mentioned, buying the dip in a bear market is quite possibly the worst decision any investor can make. For more on this, you can refer to an earlier article addressing this subject, as well as a more superior approach. To drive this point home, simply inverse the market condition.
A bear market is the perfect inversion of a bull market. If you invert the scenario then that would imply that investors buying in a bear market would be the same as investors selling in a bull market. However, the appropriate course of action is to buy in a bull market and sell after a topping-out formation.
Similarly, the correct course of action in a bear market is to sell, and then to buy after a bottoming formation or structure. The fact that the majority of Crypto investors promote continuous buying during a bear market reveals the shocking lack of market knowledge and experience.
Destroying Foolish Practices
Regular readers will be aware that I have spent much of the past two years addressing incorrect practices, while simultaneously providing appropriate and correct investment practices. You cannot buy or outperform experiential knowledge, apart from “luck”.
Even though altcoins can still edge lower, the odds, as well as confluence support strong accumulation during this phase. It’s a case similar to that of the following scenario:
You cannot expect a good outcome by practicing foolishness. However, you can sometimes experience a negative outcome while applying good principles. Does that then mean that you choose to practice foolishness as opposed to sound principles?
Quite simply, no it doesn’t. Once again, something so theoretically sound and simple will go over the heads of many Crypto investors. Given the chance to relive 2022, would you buy altcoins, knowing what you know now? Or would you buy the bottom in September? An honest answer to this question will reveal a lot.
The Temptation In Reverse
Once again, the bull market will trick investors to continue buying, once a topping-out structure is in place. Latecomers will also look to enter the market at considerably overbought levels. The temptation to repeat a similar form of destructive behavior will be present, and not only for the inexperienced investor.
Greed is an incredibly powerful force, and the only way to defeat it is to have predefined points and levels of execution in place. This is something investors need to begin considering now, even though it may appear to be premature. Ironically, it isn’t premature, for the simple reason that decisions at this stage of the game are likely to be less affected by greed.
Try deciding on an exit point, or level when the market is in a full-blown bull market. For most, it’s an impossibility, the euphoria and greed completely override rational and logical thought processes. Planning needs to be done now, or at least during the first half of 2024.
Final Thoughts
When I began exiting positions in May of 2021, many thought it was perhaps premature, even myself. However, the fruits of a disciplined approach later proved it to be a pretty good exit, as it turned out to be Bitcoin’s initial top at $65K. Successful execution of strategy comes before squeezing the last drop out of a trade.
Choosing the latter can often leave you on the wrong side of the market. Doing the right things at the wrong time is still an ineffective practice. You have to get it right if you want to be on the winning side. It’s time to begin strategizing your approach. See you next time!
Disclaimer
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.
