December 16 market analysis: two types of people in the market

We often say that most people in the market are leeks, why? It seems that the life of leeks is not good, and they are born to be cut.

What led to this situation was the deep human nature behind it.

We came to this market with the purpose of making profit, and making as much profit as possible, but the market cannot be presented according to the script we expected, so there will be various routines of "cutting leeks".

Today, we will not talk about routines, but only talk about the attitudes and reactions of two kinds of people to profit and loss.

When faced with profit, the first type of people will withdraw the profit and spend it to enjoy spiritual or material life. This kind of person likes to feel safe and has a strong aversion to risk.

The second type of people will take advantage of the victory and chase after it. They don’t want to settle for nothing, but to earn more. The method usually used is to increase leverage or invest a larger principal until the profit is reduced or even the principal is lost.

In a bullish market, the first type of people usually won't make too much money, while the second type of people can make a lot of money, and even ridicule the first type of people for not knowing "the way of investment".

However, the market is often bullish and bearish. After a long time, the first kind of people often live better.

When faced with losses, the first type of people tend to stop losses quickly due to their strong risk aversion. I would rather lose a small amount of principal than go to gamble to rebound.

The second type of people will continue to increase investment when faced with a loss, and dilute the cost. After all, a slight rebound can not only return the cost but also make a small profit, similar to doubling the investment in gambling games.

If the market is in a bullish market, the first type of people can only make very little money, or even make a small loss, because if they don’t make a rebound, they will probably see the market rebound after the stop loss, and regret it.

The second type of people will earn more, increase their positions when they pull back, rebounds are "accurately predicted", and making money is as easy as breathing.

In a bear market, the first type of people will lose money, but not too much. The second type will also lose money, but it will definitely lose more, or even lose nothing.

In the market, many people are the second type of people, which is why most of the market is leeks. Investment is a loser's game. The comparison is not how many mistakes you make, but how many mistakes you make.

The market is like a jungle, everyone is looking for their prey with a gun, when you see the prey in front of you, you are lurking and waiting for the prey to approach, and then kill with one shot. Or chase the prey and prevent the prey from escaping, and then be shot dead by the lurker?

Those who lurk are the first type of people, and those who run after their prey are the second type of people. They are likely to become the prey of the first type of people.

So how can you become the first type of person? In fact, many people have changed from the second type of person to the first type of person.

If you ask me, the answer I give is also very simple: avoid minefields, keep your principal, and don't invest if you don't understand!

For long-term investment, you must buy within a sufficient margin of safety. Judging from the current price of Bitcoin at around US$7,000, do you think this price is within your margin of safety? If it's not there, don't buy it.

In a highly volatile market like the currency circle, where should the margin of safety be set? First, calculate based on the historical trend and the current price, and then calculate a psychological price, then give a 50% discount. This price is basically what I think is a reasonable margin of safety.

I estimate that the marginal safety price of Bitcoin is in the range of 5,000 to 6,000 US dollars, which is not applicable to everyone and is for reference only.

If you buy at this price, you may still lose money, but you won’t lose too much, just wait for the compound interest of time.

It should be emphasized that the concept of margin of safety is only valid for valuable investment products. If the investment product is worthless, no matter how low the margin of safety is, it will not help.

Some people may ask: What if the price never falls to my margin of safety, and the market takes off, what should I do if I miss this opportunity?

If you miss it, you miss it. Opportunities don’t appear only once, and prey can’t only appear once. If it’s just a so-called opportunity, how is it different from gambling?

Are you the first type or the second type? Welcome to discuss.

Lighthouse Community—Jiangge

Lighthouse Community—Jiangge

BTC

Bitcoin completed its dive over the weekend, and it will maintain a small shock today. The subsequent volatility of the market here will increase. The bottom can break through 7000, and the top can go above 7300. However, in the case of intraday trading, it is more likely to be What is below is to give a chance to buy more orders.

ETH

The trend of Ethereum as a whole shows a downward trend. At present, Ethereum as a whole has no obvious bias, and more follows other mainstream currencies. Therefore, in the short term, you can refer to the trend of Bitcoin to make orders.

BCH

If the overall market of Bitcoin Cash follows its own independent market, then it is better to go low and multiple here, especially for the short-term within the day. But in terms of the medium line, the decline of Bitcoin Cash is not enough.

LTC

The trend of Latiao is also a shock, and it will come down to step on the bottom, but it should be noted here that in the overall trend of Latiao, it can complete the time travel of the last period of decline in the trend of long and short doubles.

EOS

The same is true for the trend of grapefruit. There is a rebound in the short-term, and a decline in the mid-term. Therefore, it is recommended that such a trend is still high and empty, but the price must be higher than the current price.

XRP

As mentioned earlier, as long as other currencies do not move much, Ripple will go its own way, and it is currently leading the decline today, but it is not appropriate to chase the short.

Bitcoin price at time of writing: $7088