Crypto World 🌍 : Market Behavior 📈

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Market psychology is an extremely important element for crypto trading , and essential for guiding your attitudes towards success . Without a well-established discipline and without a healthy tolerance for losses (which everyone will sooner or later face copiously! regardless of how good you are in making technical analysis in the crypto world), Every trader is in fact destined to take higher risks which can lead to loss of much more money than he had put in the budget.
Of course, with this we can not ignore the fact that human beings are very impulsive and emotional. Some people refer to this condition by stating that we are also irrational, but in reality we will prefer to talk about emotionality and impulsivity , perhaps applied not to the individual, but - as often happens on crypto trading - I. E when you into a crowd , and your activities end up becoming an integral part of the so-called market behavior.

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Being part of the market

At a point we all have a common purpose or a set of similar emotions, sharing a common behavior . Despite the similarities, every person is in fact subject to competing and conflicting emotions, and such changes could induce others to follow and move with the behavior of the crypto market. The same can also happen on the financial markets, where a "crowd" can become so influential that it attracts other investors, helping to increase the entire perimeter.
Well, in the crypto market all this ends up taking on a more than important importance: predicting the future mood of the crowd , and estimating the balance between 'rise' and 'falls' in the market, allows in fact to choose where to position oneself with greater awareness .
Having clarified this, it is also evident that most of the online books and training courses on this issue suggest that new traders always follow the trend and never fight the market to try to anticipate the inversion of the trend. Even if this is true at least in general, it is also true that following the behavior of the crowd blindly can be an equally devastating attitude such as going against the market by being actually unprepared.
Therefore: by default , every inexperienced trader should always enter positions in the direction of the trend by following the most appropriate risk management strategies, since the main objective of the newbies should be to minimize the risks and avoid the closure of the risks.

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Because we are often led to act with the crowd

There are some reasons that can show us why people are attracted by the extraordinary power of the crowd, so much so that they are pushed to behave like the crowd, without a more critical attitude. The first is probably greed , which has led many traders to bankruptcy, and needs to be carefully managed through a rigorous discipline that can overturn this concept. Analysts of human behavior have found that people experience greater fear of losing a profit opportunity than losing their savings .
Many people also fear that, by doing something different than the crowd, they could be more easily mistaken and fail. Therefore, the concern to fail while friends, colleagues and competitors follow the crowd, pushes many people to act like the mass, so that if they lose, others will suffer the same fate.

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A search for Leadership

Another powerful motivator behind the behavior of the crowd is the tendency of people to necessarily look for a leader to follow ( @kingscrown, @steempower, @jrcornel, @cryptographic, @ivanli, @crypt0 ) : the leadership can in turn be found in one person, in a group of individuals or perhaps in the balance of opinions of the crowd, especially if we believe that the majority "is right". So far, the behavior is quite reasonable: however, it is also good to remember that blindly following someone without conducting an impartial evaluation could lead to negative results, especially when their money is at stake.
Remember that there is a fundamental flaw in the behavior of the crowd, and it is its inability to predict the turning point in the trend. People who blindly copied the actions of others end up losing exactly as much as the people they follow, and thinking the same way everyone thinks usually involves wrong conclusions.
In short, following the crowd is often a convenient action, but this is not always the case, and it would always be worthwhile to approach the attitude of the crowd with an awareness and a better capacity for independent evaluation.

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Go Against the Market

As can be understood, the opposite of the behavior of the crowd is represented by the "opposite" attitude to the market . It is a difficult attitude to assume: it means in fact going against the most popular or widely spread opinions on the market, going against it. Following such a strategy is considered very difficult, especially when the current market movement is supported by a stable flow of key support indicators. In short, these are strategies that have many risks and are usually used by highly experienced professionals.

But what to do, then? I said that sharing the behavior of the crowd could lead to losses, and going against the market could do the same!
Which solution is it?
The answer is fortunately quite simple: you should follow the market when it coincides with your trading strategies, and exit the positions as soon as the market turns against your strategies.

To Be Continued!!!!