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"HODL" Mentality: Lessons for TradersThe HOMie Mentality: Buying at ATH Many novice traders, or HOMies, fall into the trap of buying a cryptocurrency when it's near its all-time high (ATH). They're influenced by FOMO (Fear of Missing Out) and jump into the market without a clear strategy. Market Dynamics: Understanding the Cycle Cryptocurrency markets follow a cyclical pattern of ups and downs. Novice traders often enter during the euphoric "FOMO" phase when prices are at their peak. The Emotional Rollercoaster: Avoiding HOMie Mistakes To avoid the HOMie trap, it's crucial to detach emotions from trading decisions. Create a clear strategy with entry and exit points, and stick to it. Risk Management: Protecting Your Investments Novice traders should prioritize risk management. Only invest what you can afford to lose, and avoid putting all your funds into a single asset. Education: The Key to Success Novice traders can transition from being HOMies to informed investors by educating themselves. Learn about technical analysis, market cycles, and different trading strategies. Conclusion: From HOMie to Trader The HODL mentality can be a valuable strategy when used wisely, but it shouldn't lead novice traders to make impulsive decisions. By understanding market dynamics, managing risk, and educating themselves, HOMies can transform into informed traders who navigate the crypto market with confidence. Remember, successful trading takes time and patience, and every trader, even the most experienced, started as a novice. 🌐📈💡 ❗See related ideas below❗ Don't forget to like, share, and leave your thoughts in the comments. 💚🚀💚
Education
by Yaroslav_Krasko
1
SETTING REALISTIC GOALSHey Traders, Traders whether they are new to the world of finance or have been involved for a while can benefit greatly from setting specific goals in correlation to what it is they actually want to achieve. There's a million different ways on focusing and goal setting in trading and a lot of people get it wrong straight out of the gates. To this day I still see some professional traders still setting their goals wrong. Traders need to get to focusing on the process of trading, including strategies, structures, journaling, whatever it may be. You have to focus on these processes set in place for yourself regardless of results. This can be so much more effective with getting to an area of consistency compared to just focusing on returns. One key takeaway I want you to get from this post is all traders, whether novice or whether you're experienced, you should be basing your trading results off of how well thought out the trading plan was, which includes how the trades will be entered, exited, how the money will be managed. That right there is how you measure performance, not the Profit and Loss that comes from the trades. Process Goal Setting - Initially, when getting into trading, most traders look for some kind of goal surrounding numbers. We are all here to make money, to make percentage gains. So we tend to gravitate towards setting our goals based on what we want to return, what type of money we want to make, what time are percentage yield we want to bring in. This is damaging in its own right. It's very easy for people to say, OK, I'm going to try an make 1% per day and I'm going to do all my trading to make 1% per day. Then all of a sudden they start planning in the future. "Okay, I make 1% per day everyday for the rest of the year," and then all of a sudden they start calculating what they're expected to return and they give themselves these high hopes in achieving that. But The thing is, what they're not understanding is given their strategy, 1% per day might not be possible. We can't say yes. I'm going to make 1% per day and our strategy not allow that to happen. We may only find one opportunity per week given our strategy, we might only find three opportunities, but we have a 33% win rate. So having these unrealistic, number focused goals are really damaging because no matter how much work you put into it, it may not be possible. Just like any other business, we need to develop a process. Anna system and our goals need to be set on doing that process an working that system correctly and consistently. So rather setting goals for, I want to make 5% this month. Set goals like I want to only take trades which are an A-Grade set-up in accordance to my strategy. I want to journal every trade for the next 4 weeks. Goals like these make you focus on the process, and I don't know a single business that is successful without a good process. Most businesses don't get profitable for a set period of time. Some even just fail. Without a process and without setting goals aligning with those processes will make your results be based on chance and not based on skill. Aim for consistency - When it's early on and you may still be demo trading or trading with a small amount of money, I want you to start aiming for consistency. Now I know that can be hard when running in drawdowns or perhaps even trading a strategy that isn't profitable, but what you can do is aim to be consistent in your process aim to be consistent in your decision making. Aim to be consistent in your risk management. What you will learn is whether your strategy is profitable or not. You will learn a lot about the market. What you will notice after a long period of consistency (Trade for at-least three months) is your areas that need improvement. let's stay consistent and every single day you do the same thing, you trade the same setups, you trade exactly the same way, which a lot of people don't have the self discipline to do. You will notice areas where you can improve on based off of those results. Most people give up and fail because they're not disciplined enough to remain consistent in a strategy which isn't providing them with the unrealistic returns that they're aiming for. If you sit down and you take it seriously for three months, win or lose, I guarantee you will take about 18 steps forward in the right direction compared to just sitting on the balance rope jumping from strategy to strategy. It is okay to not trade - This is where consistency and discipline delivers the reality check. The market is constantly moving, sometimes slow, sometimes fast, and that gives people the impression that their strategy is always valid and they always have to be risk on and always have to be trading. This isn't the case. Trading during slow times or making impulsive trades outside of the scope of your plan is such a common issue that I feel the need to point it out in today's message. So many people will try and force their strategy or force themselves to get in and make money when the opportunity isn't there. Have a plan. Understand what it is you want to see. Understand what it is you want to trade and wait patiently until that opportunity arises. Do not try and force trading. It will only result in one way and it will not result in you achieving the goals that you want to achieve. Start small, then grow - I witness day in day out, traders just trying to get onto big accounts because they believe if they had more money they would achieve better results. They build the most complex strategies and trade four different strategies across 12 different assets straight out of the gates. This is not an easy game. This is not an easy money grab. It can generate thousands and thousands of dollars if done right. But it has to be done right. The learning process is the exact same. Start small, be a niche trader focused on a few manageable goals. Results will come in time. If you trade according to your trading plan you've remained disciplined and you do everything I spoke about today, you will see improvements and progress. Set goals, realistic goals that have nothing to do with profit and loss, but have everything to do with being a consistent, self disciplined trader and you will see returns come in the long run. If you develop the foundations to being a profitable trader, the profits will be delivered once you get a greater understanding of what needs to be done. I wish you all great success and cannot wait to hear about your consistency in trading!
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Education
by the5erstrading
69
A trading system for rookiesThere are many trading systems but most of them are very complicated for the novice trader. The 30d/200d SMA trading system is simple, easy to comprehend and gives few and reliable signals without many false signals. The trader has to draw the daily diagram of the stock. Next they have to install three simple moving averages of prices, the 30d SMA, the 200d SMA and optionally the 9d SMA (to track the price formations). Price movement below 200d SMA most of the times signals the change of the stock’s long term trend to declining and this is the reason we must never buy a stock below 200d SMA. Correspondingly, price movement below 30d SMA most of the times signals the change of the stock’s midterm trend to declining and this is the reason why a new trader must never buy a stock below 30d SMA. Following these two rules, a new trader can avoid getting trapped in a declining trend that can diminish their capital. New traders are unaware of the risk of holding a stock with a downward trend. They are carried away by the excitement and hope of its prices returning to the levels they bought it and do not sell it. So, when they now have a loss of 70-90% in the capital they invested, they are seized by panic and sell the share at humiliating levels, losing their money. This is also the main reason that the 90-90-90 rule applies, i.e. 90% of new traders lose 90% of their capital within 90 days. The second important reason is that they follow the very short-term trend of the share that gives repeatedly false entry/exit signals, so they do too many transactions that lead them to big losses. Only very experienced traders can successfully track the short-term trend of a share (minutes, hours). My opinion is that a new trader should follow the 30d/ 200d SMA trading system, which applies in the daily stock diagram, and leads them to a small number of transactions with minimum risk. In fact, this system, if firmly followed, may lead them to big gains. Later when a rookie trader gets experience, they can use the same trading system for shorter timeframes i.e. in stock diagrams of 1 hour, 30 minutes, 15 minutes and so on, timeframes. A complete list of guidelines for the novice trader is presented next. I am sure that following these guidelines, a novice trader can beat the 90-90-90 rule.
NYSE:HSBCEducation
by Gnothisafton
10