Better trading through negative affirmation

I prefer to trade crypto through macro/fundamental analysis as apposed to pure technical analysis (TA) on micro time frames. Unlike TA your indicators to buy and sell come from slightly more ambiguous sources and require a greater level of information processing to determine the correct decision.

Before we go further, I don’t think fundamental is any better than technical analysis but i’m a little more comfortable with it. I also think the best possible strategy is to consider all types of analysis.

When it comes to fundamental analysis you’re job is to collate various forms of information to arrive at a valid conclusion. That ‘valid’ conclusion however, for most traders is arrived at by a single entity. Your abilities and decision making process are solely responsible for your wins and losses. This is where negative affirmation comes in, the tl;dr of it is:

Not to ask, how do I know i’m right, but instead to ask how do I know I’m not wrong.

These may sound like one and the same, but let me explain it another way. It’s important to search out information that opposes your viewpoint, instead of affirms it. By consuming articles, interviews and other data that affirms what you currently believe, you’re not stress testing your view. After all, you already believe X scenario will happen based on previous assumptions. 

For example, lets say you’re interested in an upcoming ICO. You’ve read the white paper, examined the dev team and the proposed road map looks feasible. After this you conclude that you believe this coin has a viable use case and in 2-3 years the company will have a higher valuation than it will at the time of launch. 

There are many factors that go into evaluating an investment opportunity such as an ICO, so it’s hard to list them all. For arguments sake lets say after conducting the initial research you look into market sentiment, business opposition and the opinions of several figures you respect. In this situation most investors search for and only acknowledge the opinions that affirms their current beliefs, this is called confirmation bias. This process is therapeutic and helps to bolster your ego, but until the criteria has been met (in this example, taking a profit after 2/3 years) you should remain humble about your position. 

This is where negative affirmation comes in, to actively search for and consume any data or opinion that doesn’t align with your own to develop a better understanding of the situation. The important part in this is to categories these opposing opinions into three categories. 

• 
Those that: Affect my view

• Those that: Don’t affect my view
• And those that: I am unsure whether they affect my view.

A 6 word reply to a reddit thread that opposes your opinion can easily be placed in the ‘doesn’t affect my view’ category, where as a well researched and constructed article may be placed into the ‘affects my view’ category. Once you have conducted sufficient research you can then evaluate each column and asses whether or not your initial viewpoint should be adjusted. 

To answer the questions of, Will XYZ token be worth more or less than I paid after X months, requires a great deal of knowledge, understanding and in the end may still result in you playing a 50/50 sum game. After all, no one has the ability to see into the future, but you do have the ability to conduct thorough research and decide whether or not you want to bet against the consensus. The important thing is not to fall for confirmation bias, and push against your desire to be affirmed. We all want to know we were right, but it’s those that are pragmatic about stress testing their opinions that really win.