RE: SEC S18-W3 || Psychology and Market Cycle

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SEC S18-W3 || Psychology and Market Cycle

in hive-108451 •  5 months ago 

Strategies to Avoid Emotion-Driven Decisions: Diversification: The Spread investments across the different assets to really help reduce the exposure to any or a single token's volatility.

We know that diversifying our investments means putting our money in different types of assets. This way, if one investment drops in value, the others might not, so we won't lose as much overall. It's like not putting all your eggs in one basket, which helps protect you from big losses.

Setting Limits: Using of the stop-loss orders to practically mitigate losses and also take-profit orders to well obtain secure gains.

In my experience, setting stop-loss orders means deciding to sell an asset if its price drops to a certain point. This helps prevent big losses. Take-profit orders are the opposite; you decide to sell when the price goes up to a certain level, locking in your gains. Both of these tools help you stick to your plan and avoid making emotional decisions when prices change.

Contrarian Approach: This very set or kind of strategy really involves buying them when the prices are really really falling (red) and the selling when they are definitely gaining rising (green). It so capitalizes on market overreactions and as well the corrections.

As far as I know, the contrarian approach means doing the opposite of what most people are doing. When prices are falling and everyone is selling (red), you buy. When prices are rising and everyone is buying (green), you sell. This strategy tries to take advantage of the times when the market overreacts and then corrects itself.

Good luck

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