Buying HIGH Selling LOW

You might know the basic when demand is high, prices rise and when demand is low, prices go down. Whether it's a stock, foriegn currency, cryptocurrency or any other financial investment, the goal is to buy low and sell high.

If you don't sell at a price lower than you have bough, then you are a profitable investor. Its easy to say this and all those investors with money in the markets will tell you how hard it can be to not panic sell an asset crashing in front of their eyes.

Canva

Investing in the stock or crypto market has never been easier. Anyone having money in their bank can now invest at the click of the button from their phones or other digital device.

While these technological innovations has made things a lot easier for people across the globe and providing them with the opportunities to earn handsomely across the world, it also has increased the propensity for mental health challenges like anxiety or depression surround financial wellbeing.

While the crypto market or stock can go incredibly high, it also can come with devastating lows. This is true when you are trading for a shorter term like day trading, swing trading, crypto trading etc.

Here behaviour is something when a group of people collectively engage in a behavior, like buying a crypto or a stock. This herd behavior is something that when an individual engage in such a behavior suddenly, so collectively it gives a perception that they are doing something worthwhile, thinking the group might know something that you don't. This is something motivating others to join. This power of collectives can become overwhelming thereby impacting emotions and sentiment of the market.

This herd behavior is one of the driving forces behind the Fear of Missing Out, FOMO. FOMO can have a significant influence on one's trading practices and even impact even seasoned financial investors leading to irrational decessions.

Its important to undertand your risk tolerance and overcome the emotions of fear and greed in investment. Ask yourself how much you can afford to lose in case of any uncertainity or market crash.

Deversification also something deemed good in a sense that could help dampen exposure to market specific risks.

So, their is no safety in crowds. You being an investor need to set up systems of rational behavior and self awareness as these may defend you against your fears and biases creating simple strategies to buy low and sell high with ease and low risk.

In a moment of bears, stocks and cryptos trade at a discounted price. This is deemed to be a good time entering the market or buying additional assets adding to your diversified basket.

Any thoughts?

Note: This is not a financial advice.

---

---

Follow me:
Hive: @decoding
Twitter: www.twitter.com/decoding1011
Discord: decoding#9631

---

Posted Using LeoFinance Alpha