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Why Are Greed and Fear Important and How Do Crypto Investors Keep Emotions at Bay?

Mind over matter is a phrase commonly used to describe the psychological power that individuals possess and the ability to control physical conditions and problems using the human mind. In financial markets, the situation is no different. Material prowess means nothing unless you have the sufficient mental power needed to weather all storms.

As a matter of fact, experts believe that psychology plays the biggest role in trading. An old saying on Wall Street states that fear and greed drive markets. It is terribly easy to succumb to these emotions. It doesn’t even matter if you are winning or losing, it is still possible to become afflicted by these two emotions. 

It takes years of experience to become a tough market participant and finally gain an edge in the market. Most world-renowned investors regard cryptocurrencies as a market where fear and greed have the highest influence. Are you one of those that cannot resist urges and are a slave to an impulsive mind?

In this article, we will dissect the two main emotions that investors face. Only by understanding them, we can get a grip on our investing journey. After reviewing greed and fear, we will also showcase their specific influence in the cryptocurrency market. 

How Greed influences your trades


Within the crypto community, traders commonly refer to greed as FOMO. Standing for ‘Fear of missing out,’ the emotion creates anxiety which causes you to severely influence your trades. Most of the time, investors simply experience greed as a result of thinking that they are missing out on opportunities. Likewise, it is easy to believe that you are late to the market and that it will catapult prices while you are a bystander watching the screen.

Why do people experience FOMO and greed? Because they are not in a position. Similarly, one may become greedy if he is inexperienced and wishes for overnight success. We have examples of ‘booms’ where significant interest in a niche market led to a sudden and massive rise. 

In the 90s, the craze surrounding internet stocks led to the dotcom bubble. More recently in 2017, Bitcoin’s own surge in popularity led to a massive influx of new investors. Most have found out about cryptocurrencies too late and have invested at the very top. 

Through the advancement of the internet, we now have a microscopic view of how greed works. In this specific case, we saw cases where some people sold houses, cars, and other valuable possessions to buy a risky asset at extremely overextended prices. This kind of get-rich-quick thinking ruined most new investors, who never returned. 

Managing Greed

Another old Wall Street phrase says that ‘pigs get slaughtered.’ In this context, pigs represent a slang term for greedy investors. Indeed, this kind of investor does get slaughtered by the market in the end. Be it entering a position on a whim, using too much leverage, or not taking profit, greed comes in all shapes and sizes. 

But how do you overcome greed? Most believe that it is extremely difficult to suppress this emotion, especially when you are on a run. 

For most, awareness seems to be the key. If you are aware of your actions and emotions, you will never make a mistake, at least an impulsive one. By doing so you can not only improve your game when it comes to planning trades but when it comes to executing them as well. After all, a trade which you did not execute as originally planned is no trade at all. 

Another crucial factor is to introduce rules. Risk strategies mean everything to an impulsive mind and you can leverage them to stay far away from greed. Are you prepared to trade today? Then plan ahead for a viable entry, set a stop loss, and decide for a profit target as well. 

If prices did not hit your entry, it is alright since you can always trade tomorrow. At least you did not jump in at a high entry. What about the stop loss? It will help you manage risk by protecting your position. A 10% loss is better than having your entire position liquidates. 

As for the profit target, it will help you stay true to your convictions. If you let your trade run and exceed your target you may get lucky a few times. But for a majority of your trades, you will ruin what was previously a good trade and risk having the price retrace.

How fear influences your trades


If we consider these emotions to form a certain duality, it is possible to view fear as the other side of the coin. It is no different from greed, affecting your trades only in the opposite way. Fear is the mind-killer. It is the emotion that holds you back and prevents perfect trades from being executed due to a feeling which leaves you thinking that the worst has not yet come.

Fear usually occurs after a trader experiences several losses in a quick session. One can also experience fear if the market traded in a downtrend for a prolonged time. It is easy to imagine how flash crashes and bear markets can lead to ‘market PTSD’ and completely immobilize the average trader.

The line between a bull and a bear market is not always clear. In fact, investors usually discover if one ended or just began once it is too late. Due to that reason, investors are often warry and might exhibit excessively protective behavior. 

Fear affects both markets and lone individuals the strongest during herd behavior. In such a case, a majority of investors will trade the same exact way. Therefore, their actions could further propel markets which results in everyone’s demise. For example, a successive set of red candles combined with panic selling will always lead to stronger drops in price.

Managing Fear 

An investor should manage fear in the same way he controls greed. As previously explained, these emotions are eerily similar while remaining completely the opposite. A strong sense of control and discipline ultimately kills fear and radically improves your abilities. 

Today, investors like to use additional sources of communication and social media channels to predict prices. Most will use Twitter, trading groups, paid channels, and other forms of trading communities to discuss prices. But they can only provide you a view of the sentiment of retail traders. As such, they offer no real value. 

The ‘trading experts’ that you follow on Twitter may be right a couple of times or more, but they will ultimately fail to deliver consistent predictions. So why not rely on your own skills and intuition? Trading is a learning process and there is no better way than to learn from your own mistakes. 

Because of this, it is better for you to switch off the noise created by other market participants and think with your own head. Following the herd or counter trading market sentiment can never end well. Instead, we recommend that you trade as you would always do, with technical analysis. 

Does a piece of news or future event bother you and influence your trades? Turn off emotions for a moment and think about the situation objectively. More likely than not, you will discover a new perspective that sheds insightful light. 

One scenario unique to fear is the reluctance to buy the bottom. Red candles always appear dangerous. On some occasions, you will have the sense that bears are prepared to take prices further down. But ask yourself this. How many times did the price fall lower than your established entry? And how many times did you miss out on a perfect trade because fear struck you and you were too scared to open a position?

For the best results, it is advisable to balance out greed and fear. Individually, they represent the most dangerous entity a trader can face. But combined together, these emotions can foster a great sense for investing that can be entirely based on intuition. But naturally, you should combine it with technical analysis for the best results. 

Greed and Fear in the cryptocurrency market

In the case of cryptocurrencies, greed and fear are played out almost in the exact same way as in other financial markets. Emotions pervade all aspects of life after all and they can even stay similar in totally different environments.

As noted before, psychology and emotions play a far more important role in digital assets. Crypto traders react far harshly to events, news, and price actions compared to other traders. Moreover, they are more prone to ‘following the herd’, especially when seeing high-volume orders or significant events. 

Fear and greed are so prominent in this space that certain individuals created an entire indicator surrounding them. Simply put, the Crypto Fear & Greed Index showcases a range between 0 to 100 that indicates fear or greed in the market. The indicator is supported by several sources of social sentiment and emotions from the market which are processed by an algorithm. 

The indicator is exclusively applied to Bitcoin, but there are custom solutions as well which are focused on other major cryptocurrencies. The higher the number, the higher amount of greed crypto investors show. Likewise, a low number indicates higher levels of fear.

In both cases, investors should trade inversely. During moments of extreme greed, a trader should short or sell. Likewise, he should long or buy during moments of extreme fear. 

Which factors contribute to fear and greed?

The indicator’s developers formulate the estimated emotion based on five primary sources. A majority of the data is supported by market volatility. For example, volatility would be measured and compared with the market average of the past 30 or 90 days. If we see highly volatile markets, it may be a sign of a fearful market.

Index data for the last year

Market momentum and volume represent the second important source. By measuring average values for current trading volume and momentum, it is possible to combine them and analyze emotions. If there are high buying volumes in a bullish market, we can consider investors to be too greedy.

The other three sources come from social media, Bitcoin’s dominance, and Google trends. They respectively make 15%, 10%, and 10% of the overall data. While social media may be subjective, dominance and trends are definitely empirical values which can be objectively tested over a period of time.

Final word

In some respect, psychology dominates the world of trading far more than technical analysis. Greedy and fearful market participants have a higher influence on prices, no matter how wrong they can be. After all, the mind rules over matter and there is no way to forever leave the influence of herd behavior. 

In this article, we explained what fear and greed are. Moreover, we delved into both topics individually, to get a better grip on how these emotions work. As we have seen, they work eerily similar. In an abstract sense, they represent the same emotion. However, fear for example leads to the opposite reaction that greed would cause. 

While fear prevents traders from entering a position, a greedy investor will be a bit too ready to enter one. While a fearful individual constantly believes that we are in a bear market, the greedy investor will have a false sense that bull markets have no end in sight.

In either case, an investor can only improve his game by balancing these two emotions. No extremes in life result in a good outcome and we neither have this case in trading. By encouraging a disciplined mind that cares not for its emotions, it is possible to balance greed and fear and ultimately have them serve you instead. 

Controlling emotions is especially important in cryptocurrency markets. Digital assets are more volatile and as such, traders react far more harshly than in traditional markets. Respect the market and respect the value of time. This is the only way to weather all storms and panic, no matter how new or extreme a trading environment becomes. 

Tony Evans , Tokyo

Monday Motivation


Life’s all about appreciating what you have while planning on your next move forward . Lock and load

Tony Evans

Keep going no matter how bad things are

A post I posted 3 years ago ,and it’s even more on point this year , always good to remind ourselves.
Keep going.
No matter how bad things are right now. No matter how stuck you feel.
No matter how many times you wished things were different.
Life won’t always feel this way for you. Keep going.

motivation #keepgoing #mindset #successmindset #winningmindset #hustlehard

It’s Not Too Late to Achieve Your 2020 Goals

No one expected what this year threw at usb, 2020 didn’t materialize quite how you expected but you survived and there is still time to achieve some of your goals .

We go into survival mode our animal instinct kicks in , this is to feel safe and supported. People cope in different ways, but if your goals for the new year fell away to other priorities or comfort-seeking activities, Good job you on made it this far. It hasn’t been easy but persistent paid off .

Life still may be crazy or even crazier for some people: Work from home while the kids are virtual learning? Zoom meetings ar the the norm , zoom parties also . Humans are good to adapt and the unusual will be become this new normal it could be an excellent time to start thinking about new goals again. A lot of people are willing to write this year off as a wash, with plans to begin anew in January, but I challenge you to consider if you have the capacity for a goal in the last hundred days of the year. It’s not too late to end the year strong. Are you ready to salvage this year?

How to achieve the goals ?

Choose the goal :

It shouldn’t be extreme, unrealistic, or require massive changes to your life to achieve. There only 30+ days to go .


Be very detailed in what you want to achieve , if you want to achieve weight lost , don’t say I want to loose weight make a goal I want to loose 2kg

Choose a motivational Goal

My goals are business related but make sure your goals is personal and has. A emotional reason behind it It should be something important to you; otherwise, you’ll lose interest long before the year is over

Daily goals

Our human brains and bodies will resist too much change, and we’ll be seeking the comforts of our old routines within a week or two (or less)! This is normal and expected. It’s the old elephant situation “how do you eat a elephant ? A piece at a time !”

Are you ready to end the year strong with me and build a positive start for 2021.

Remember you survived everything 2020 has thrown at you , let’s end the year on a. Strong note !

Why No good can come from FOMO As An Investment Strategy

What is Fear of Mission Out or “FOMO” ? Simply it’s a term used to describe the anxiety ( fear / greed as we described ) we experience when we see that other people are making money and we feel left out .

Social Media

Over the years Social media has become a major catalyst for FOMO. This is with everything in life but When you see updates on Facebook , Twitter Instagram etc it becomes more real and highlighting the incredible returns / profit that is being made by friends . Even if we want to feel happy that they enjoying great success however the other sids of our brain also asks us the “I” feeling knowing that we are not having that profit .

With this kind of situation people are easily diverted into situations where they follow do what so called experts say and loose out .

I use two principles personally and with my clients:

Principle 1 :You work hard for your money, you don’t want to put it in crazy situation. I always say you should do your research, talk to a financial expert and fully understand what you are investing your money in. If you “invest” your money into something you don’t understand it’s be. A big problem and our emotion greed and fear will create havoc with us .

Principle 2 : making money boils down to this in cryptocurrency is determined by the price you buy and the price you sell . What’s your exit strategy for that investment .

So please do your research and/or talk to a financial professional before start investing any questions please send them over

“If you want to go fast, go alone. If you want to go far, go together.”

“If you want to go fast, go alone. If you want to go far, go together.”

This is an African proverb I’ve read around 8 years ago and I have it in my office .

Why am I bring this up now ?Well we live in a time where there is so much information to absorb, from news , experts , social media etc that one cannot do it !

There comes a time when you have that feeling that the whole world is on your back, you feel the need to know it all and you feel responsible for everything. So what’s happens You become a busy fool you know a lot about unuseful things, this creates problems and frustration .

If you decide that you need to do it all alone it’s going to be overwhelming and frustrated :

What I found is that Listening to what others have to say, as they are going to contribute to your idea. And your idea will then be group’s new idea, and it will grow, contribution by contribution, gaining a strong momentum.

Building a team one can rely on and grow together is key to become successful , as sharing the ideas and the work load will make goals and projects come to a successful conclusion ,

I always say there three sides to every story ,

-your side – their side – the truth !

Building the group around you has a huge positive impact on all aspects

Prioritise what motivates you

I am not the biggest reader but I make a point of reading a business or motivation book monthly. What I found out and picked up a few tips from highly accomplished people like Richard Branson , Warren Buffet , Bill Gates etc , and there is a few things that these Entreprenuer do the same . Here are is one key strategies that a minority of them us .

Prioritise what motivates and give energy to-you:

We all would love to though to be able to take recharging weekend trips, that’s not realistic. However there are plenty of ways to take a break from your weekday routine that don’t involve hopping on a plane, boat or ship 😉 . This could involve everything from having a leisurely Saturday morning breakfast, to sitting reading book , having a drink with friends , there are many ways to relax .

Bill Gates likes to and down on his weekends. “Playing bridge is a pretty old-fashioned thing in a way that I really like,” he said in a Reddit AM session in 2014. “I was watching my daughter ride horses this weekend and that is also a bit old fashioned but fun. I do the dishes every night — other people volunteer, but I like the way I do it.”

Richard Branson takes a slightly more active approach: We read this in The Telegraph that he prefers to spend his Sundays doing more physical things, like paddleboarding, boat racing, and rock jumping.

When you around people for nearly 16+ hours a day , spending time also is something I do really enjoy spending time alone . This can be energising, great time to reflect and meditate on what is important to oneself , looking and add to the goals . A study frond from Harvard’s found that people who spent 15 minutes reflecting at the end of the day had higher levels of performance than their colleagues who did not take the time to reflect on a daily basis.

One key thing I try and do as much as I can , spending time as much as with family , partners, or friends is important, but not necessarily something they have time for Monday through Friday. The weekend is the perfect time to prioritise connecting with your loved one. Ones family is one of the greatest motivation to keep one going during the crazy week and any difficulty that might pop up .

Growth comes from conquering the challenges

Conquering challenges

How true is this statement ? True Growth only comes from :pain, difficulty, transitions, heartbreak, and losses . What one finds is growth doesn’t come from stagnation.. growth comes from change , and the ability to adapt or pre empt them.

Change comes from within… and it comes from you , there no magic pill !

Growth happens when you let it.. when you accept, when you want it and are committed to carry out change .

“It’s impossible.” said pride.

“It’s risky.” said experience.

“It’s pointless.” said reason.

“Give it a try.” whispered the heart.”

Take the chance. Life has so many surprises.. when will I sleep next? will my card get declined if i book that ticket, is this all worth it? Will I get that job? Will my business succeed? Will I ever get married? You don’t always need a plan.. sometimes you just need to breathe, trust, let go, and see what happens.

Be open to change.

Be open to self-growth & it will come.

Fear & Greed – Understanding how emotions are driving markets?

What most people forget when starting to look at investing is how much the emotions of fear and greed will play an important role in the behavior of stock / crypto prices , economic statistics, valuations, earnings, and . Short term these two emotions are just as important as any other factors or even more so .

This post will go through the role fear and greed play in the psychology of the market, and how investors can use it to their advantage . One of the greatest investors in the world uses this psychological techniques :

Warren Buffett on Fear and Greed

What is fear and greed?

For as long as investing has existed, it has been clear that price movements are not always rational, they are more emotion playing a key role in the decision making of investors. Of all the emotions that can affect the prices and other assets, fear and greed are the most unique .

Wen greed dominates, investors are concerned with more returns . Confidence is high, and headlines good news. This is also when the prices of riskier assets outperform conservative assets.

When fear dominates, investors are concerned with preserving capital. Investor confidence is low, and headlines of news are bad . This is when safe haven assets like US treasuries,gold , Bitcoin often outperform other asset classes.

How do emotions affect the stock market?

If you look at the price chart of any crypto / stock market index, you are likely to notice that volatility is greatest at major highs and lows. Very often these highs and lows don’t correspond with major changes in the economy or corporate profits either. Increasing volatility is a sure sign that emotion, particularly fear, is playing a part in the decision-making process of traders. Fear is not only associated with downside – the fear of missing out(FOMO) can drive prices to irrationally high levels.

I’ll write part two tomorrow on how to utilise this and

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