A lot of people will lose money💸💸 on Bitcoin today. But not you if you read this.

As I write this, Bitcoin has just made a new all time high, and is sitting at $5200 dollars per coin. I think we may see $25,000 per Bitcoin in the next 2 years.

We are in one of the greatest bull markets of all time. And a lot of people are going to lose money. As in, get completely rekt.

Let me explain.

You see, the market conspires to take your money. It does this by playing on your psychology in nearly irresistible ways, enticing you to make exactly the wrong move at exactly the wrong time.

No one is immune.

The main purpose of the stock market is to make fools of as many men as possible.
-Bernard Baruch

Lets see how this works in practice with an example from earlier this year.

Follow me on the journey of a typical “investor” in nine simple pictures:

This is how you make a $600 loss when the market is a raging bull. Rinse and repeat a few times and you’ve blown your whole account.

This behavior is nothing to be ashamed of, it is built into your psyche. The successful traders are the ones who have learned to suppress these emotions, and to make decisions that are uncomfortable.

But you can nip this whole cycle of loss in the bud if you follow one simple rule:

Rule 1 of Trading: Never chase the price.
When the price of an asset makes a rapid increase in price, the fear of missing out kicks in.

It’s almost painful to watch the price go up while you sit on the sidelines. Your mind will play tricks on you. It will feel like the last bus is leaving town, and you’re not on it.

But another bus will come — it always does.

Take a look at Bitcoin over the last five months. I count at least four major price breakouts (the colored triangles). Every single price breakout was “closed”, i.e, the price eventually returned to the breakout level or below before moving on.

This time will be no different. Remember this when you see the price taking off again.

Fools will chase, you will wait patiently.

Of course, it’s easy for me to say, and it’s easy to nod your head and promise to never chase the price.
But I have done it, and you probably will too.

Most people just have to learn the hard way. When that happens, pick yourself up, learn from your mistakes, and never do it again.

Credit

Image

Follow @belgab

Upvote~resteem~follow~comment