STEEMCRYPTOACADEMY SEASON3//WEEK2//HOME-WORK POST FOR ASAJ, MARKET PSYCHOLOGY, AND TRADING PSYCHOLOGY.

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Hello professor @asaj, you did well explaining I really loved how you used your analogy of Jane to explain everything, some few months ago Bitcoin was booming, it got up to 30 dollars, but now as we speak Bitcoin is at 33,294.00 dollars, what I'm trying to say is that in the crypto Market there is always going to be fluctuation of prices we gain when coin rises you can sell and make massive income and when the price falls we cry that's why the first three letters of cryptocurrency starts with CRY.

In the case of Jane, I really think the admin in the telegram group didn't mentor her well, she could have understood that patience is the key as far as cryptocurrency related things are concerned, it came. To her to been an emotional act that's why she acted the way she did if the price of cryptocurrency falls to bearish form you obviously have no issue to panic or at that moment sell off your token knowing fully well that what goes down must surel go up.

God so kind the cryptocurrency she bought wasn't a stable coin, if not the story could have been different, definitely we couldn't have been talking about this at this time.

The case study given is an example of what type of psychology? Explain the reason for your answer.

I think from what transpared within Jane is pointing toward a particular direction it's all about negetive psychology she was totally bias since the market was falling in a bearish form which is not easily to return to the bullish even when you set your stop loss and all the rest, I think Jane was totally bias.

Bias affects personal decision of the trader alot and that was practically what happened to jane, bias is basically to have a favour in a particular something in the expense of another, by so doing the ability for you to make wise decision will be put into disreput, that's why you must always take wise decisions.

The judgement you pass expecially during trading may be gut, instead of you having a basic fundamental, and technical analysis toward the particular transactions that you want to execute bias will make you to have a double mind, that's why in the world of crypto you must possess this certain characteristics that I have uploaded below.

Bias practically insinuates that you in one word will most-likely trade on asset that you have maybe gained profit in before, or totally avoid an assets that you must have had a total loss before, you as a trader should have the mindset to overcome rational approach toward setting up whatever transactions you wish to execute.

Using the case study above, list and explain at least 5 biases that influenced Jane's trading behaviour with examples of how it affected her behaviour

Representative bias

At this phase you as a passionate trader will be stocked at this time you need to act as a professional, galvanized your intelligence in order to recap your previous sucess in trades at this point you may deploy analysis but not in every trade, Every trade that you deploy will surely pay off along the process you should continue in this path, you do what favours you remember. If at all Jane followed this path she couldn't have ended up the way she did

Negetive bias

This particular one constitute for more inclined and educated traders to toll toward the negetive side of a particular trade, instead of knowing what went right, this could eradicate your entire strategy, in this case change is required slightly in order to make massive profits. If at all Jane followed the trend and updates as they call it signal, she could have known when her assets was overbought, or oversold

Status quo bias

Here your previous strategy will comes to lime light, you will be mandated to use your previous strategy to trades as the case may be, instead of exploring the new ones you as a trader will stick toward the quo, if Jane has adopted the previous strategy that worked for her when Bitcoin was about 10 dollars, and perhaps put in a fundamental analysis trust me she couldn't have been heart broken and wanting to sell off her assets simple because assets went to bearish

confirmation bias

This is when bigger weight will come to fray, here the new analysis you deploy will be pre-formulated by the knowledge you used to back it up, in this case the information that you have gathered will un-approve your conviction. The information Jane got unapproved her conviction toward the fact that she thought that crypto won't rise again or will take too much long time before going back to bullish form

Gambler's fallacy

This is a phase where you place your mind that an assets will be going up, this that assets will continue to rise, you will find it hard to believe that there is a reason that a coin proceed tail side-up instead of been head, how i wish Jane had this mindset she could have still remained dedicated that crypto will for no time heat the bullish trend

List and explain how each bias you have mentioned can be avoided?

Representative bias

Since it has to deal with the previous sucess that you may have acquired, now the question is what sucess because it might be good or bad success regarding the way you see it. If it's a bad success then you don't have to deploy the analysis in this case you just need to jump it

Negetive bias

Negetive bias can be avoided totally if you focus on what went rigt, in your chart so as to maximize profit if you keep on keeping an eye on what went wrong you might loose your strategy and you won't be able to figure out signal that will be used for your trading execution

status quo bias

It can be avoided if you initiate your new strategy, let the old one go initiate your new strategy and carry on with your trades, your previous strategy may no longer work maybe because of the form the volatile market is towing

Confirmation bias

Here you should always follow and analyze the market well, in such a way that you should have a some form of hope, instead of loosing hope in the Crypto market, even when the market is in bearish form, in here hope will answer all your prayers there is obviously no need to panic

Gambler's fallacy

Instead of hoping that a price of an assets will keep on going on simply because it is in bearish form at the moment, you might be wrong to correct it you should deploy other means of analysis to curtail what you see at that moment simple because crypto fluctuatee

What type of analysis can be used to monitor market psychology and trading psychology, and why? Identify the differences between trading psychology and market psychology

Which analysis can be used to monitor Market psychology?

Before I answer the question let me do little explanation, we should be able to understand that every technical analysis is underlined with the principal of Market psychology here you should put a great understanding on the crowd behavior, it is very important for us to know your overall compension to the fundamental of the analysis that will be used. Which is technical analysis, It is very difficult to forcast/predict the physcology of the market, so many indicators that I will explore some good indicator in order to assist then get it. It is very eazy for we traders to do our vital estimation and analysis.

Let's look at some indicators here

MACD this means the moving average convergence divergence (MACD), this tool helps to measure a nap on consensus when price is in bullish, to when it goes to bearish, let's look at the basic MACD, in a more detailed way, we have the MACD histogram, we use this to know the difference that exists between long term consensus in tense of it's value, this measures helps in tracking the vital difference that exists between the MACD line (Short-line consensus) and the slowgish MACD (Long-term consensus).

which analysis can be use to monitor Trading physcology

You need so many trading skills in order to be successful in the volatile Market, one thing you should know how to do very well is to be able to evaluadate your fundamental analysis in order to determine the direction of your trend. But here technical skills is very important for you trader, for you to excel via trading physcology you need to think quick/fast and by so doing please exercise discipline, in this case trading physcology is all yours.

Before you can excel in in trading physcology you should be able to explore the following

Making nice decisions

Knowing and understanding fear

Overcoming greed

Setting Rules

Conducting important research

Difference between Trading physcology and market physcology

Trading physcology	market physcology
Investors usually drives the performance of Market structure in a way that they appear to be odd prior to the fundamental's	traders choose any technical indicator that are used by traders for a clear understanding in the volatile Market
If you watch very well investors who are successful usually controll's greed, and fear, this two emotions usually lives within we humans	there is always a concise understanding on how to trade in the volatile Market
an Investor who who understands this very well will surely have the objective needed to merit his emotions	courtesy the fact that various prices, and volumes seems to be very sentimental the action of fear, and greed, will make us to check the history of the price action
If you can evaluate various fundamental's in tense of trends by using basic technical skills trust me you will perhaps become very successful in your tradings	the indicator MACD, assists in measuring a nap in consensus ranging from bullish to bearish, this simply means price fluctuation

How can you measure market psychology using a crypto chart? Select 5 trading biases and explain with screenshots of any cryptocurrency chart how the biases can cause a coin to be oversold and overbought. (Add watermark of your username)

Recency bias

This types of bias clouds traders decision making as it conjugates unnecessary decisions that doesn't apply to trading, this is associated with the act of loosing confident after some looses have officially been inquired.

Here I will show a chart of STEEM/BTC pair in the last one week

• From the chart you will find out that the price of steem was in bearish form, and if you are a traders or an investor you should be having a double thought simply because the price is going downtrend. At this time of writting this post the price of steem stands at 0.39 dollars.

confirmation biad

• This type of bias makes the decisions taking during trading to be very subjective, you can easily ignore bearish, if you have the tool for price prediction that bullish will occur soon.

• From the chart below I have done my prediction since last week that today steem will be in bullish form, you can see from the chart steem is currently rate at, 0.39 dollars, if you check the last price of steem last week it was in bearish, in this case price focast is very necessary.

• As a trader you don't have to panic what you just need to do is to employ your tool and hope that the price will fall in bullish that is the essence of confirmation bias.

Herding bias

Here different traders just looks for a way to ingnore and back out of a trade, whenever the trade is going on in the opposite direction, you don't do that what you need do is to do your analysis well, be it technical analysis or fundamental analysis by so doing plan your trade well.

• From the chart uploaded you will find out that the price of TRX, went bearish in the opposite direction, but that doesn't mean that you should back off, conduct your analysis and trust me you shall smile at the end.

• Each time price goes bearish some traders will just ingnore without conducting any form of analysis.

Attribution bias

This types of bias involves psychologist, at this phase attribution comes to play, you should be able to determine where you made errors while you where trading even when you had a poor Network connections. This type of bias is very distracting and disturbing.

• One common thing is placing my stop loss, because of network issues I wasn't able to place a stop watch of my choice I mean the way I would have wanted to do it. We are having some network issues here in Nigeria.

Addiction bias

You should be able to remember your successful trades let the memory not depart from you, it's just similar when a footballers hang their trophies in a wall, that's the essence of this type of bias.

In your own words, define the term efficient market hypothesis (emh). List and explain the advantages and disadvantages of efficient market hypothesis (emh)

For me I think market is a place where buying and selling takes place just in the essence of making profit,so of we talk about how effective the market can be it then constituents so many things, in this case efficient Market hypothesis will be associated to our own financial economic's this signifies that various prices of assets are practically very reflective to all information emernating from the market custodian.

It is very possible that prices beat the market itself, in this case there should be a risk that is adjusted based on this basics, remember Market price shouldn't outclass and react to the new information. The EMF is basically formed prior to price adjuction

Advantages	Disadvantages
It makes market rational	it makes market irrational
It helps people to safe money expecially for people who wants to migrate to the stock market.	here history is basically galvanized with examples at this phase you don't have to deploy panic.
There should be observations, once you realize that the stock market is moving in the positive direction no need for too many analysis	timing shouldn't all that be put into consideration because the market at large is very irrational

conclusion

• From my homework I guess you should be able to understand negetive psychology isn't the best way to go learning from what happened to jane, we should always learn how to put up our own analysis to survive in the financial market

• As a trader we should be able to determine when market falls into bearish and bullish form all in the aid of to-roll analysis

• The two types of Trading psychology should be given much attent because it will assists us very much if we are to migrate to the trading world

Let me use this medium to thank you professor @asaj, I really like your lecture trust me you really explained well. Hopefully in coming days I will explore more better.