Beware of the LIES YOU WANT to hear (Scam)

Why you should absolutely do your own analysis – It doesn’t matter if it’s fundamental, technical or purely going off the price action. People will argue this, that and the other – everyone has their own opinion, and that’s fine. But when it comes to trading there’s nobody who knows you better than you.

I love reading posts that say – “don’t forget to like and follow me, this helps the creation of new content” – scary thing is, if that’s what helps then what about trading? shouldn't that be the income support?

Recently I had a conversation after a post here. (yes, short Bitcoin) – the discussion went something like this. “Why would you say that, everyone is buying” the response – because everyone who says they are buying now are part of the 90% of retail traders who lose. This is unfair for me to say, but it needs saying. The issue with following, herd mentality is it’s not as easy as (BUY/SELL) – you might have a different entry, a slightly different tolerance for risk or a shorter holding expectancy.

Doing your own due diligence goes way beyond watching some news or drawing lines on the chart. It’s everything from risk management to holding time expectations. You take the $1Bn Musk pumped into Bitcoin recently – if Bitcoin drops 50%, he holds a paper loss of 500m. However, if you’re a retail trader sticking in $10k and you see a 50% drawdown, and most likely leveraged the trade! You won’t stick around. Think logically, if Tesla shares drop by 20% and most of Musk’s net-worth is tied to the stock price (not going into numbers and detail, for this example only) then Musk's net-worth at assuming $150bn will be down somewhere in the billions. ($500m now seems like nothing, no?)

It is all relevant!

There’s no silver bullet – no automation tool is going to go make you rich, as soon as that happens the company selling it will be employing traders not selling software. Indicators are areas to look at and not the gospel.

Projects and prices, especially the likes of Tesla & Bitcoin on the charts – need sellers for buyers to interact with. If the price goes to the moon, then who’s selling? Ah – don’t stress, it’s being mined & everyone is a buyer! Yup, that’s exactly how the Bitcoin price will jump to $1m a coin.
Smart money – I often see this mentioned in posts, “smart money concepts” Go look at the smart money analyzed data www.goldmansachs.com.../2019-annual-report/ smart money is winning 200 days on average out of 22o trading days. Year after year. (They ain’t buying signals).

Psychology is a big part of your analysis – just like the comment on Musk above, you need to trade your own style that marries your tolerance of risk. Here’s a post recently on the mindset in trading and how that looks on a chart.
If you take a look at retail sentiment – you already know 75% of retail traders (me and you) lose money trading, if retail is buying something (namely Bitcoin) what do you think the smart money is doing? As of this very minute we have 87% retail sentiment long and COT data showing 2k long positions & 6.7k short Bitcoin positions. So, let’s think this through – who is currently selling to the moon pioneers? Yup – the guys who win 200/220 days a year.

That’s smart money.

This is not a rant, it’s not a forecast or projection, it’s simple education.

When trading, it’s important to do your own research – know your own risks, holding periods and develop your own style.

"Successful people never worry about what others are doing" - Unknown.


Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principle trader has over 20 years’ experience in stocks, ETF’s, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.