The retail investor is often taken advantage of by big institutions. This article will highlight how the psychology of investing can be exploited when you are new to the markets and what tactics institutional investors use to make money off of people like you!
Retail traders, day-traders, swing-traders or position traders all have to deal with the same problem when trading in the stock markets. They do not know how to react when a rumor breaks out. All of them want to profit from such events but they don’t know exactly what to do.
Rules to winning in the crypto market
We can help you by giving you a set of rules that retail investors can use when dealing with rumors and news releases so that they will be able to profit from this type of situations without having any experience at all in technical analysis!
The first rule is to buy the rumor and sell when you have confirmation. This means that if a big institution announces, for example a large power move or some other event with significant impact on their asset price then it’s time not only start buying but also be prepared in case they announce something bad like a code vulnerability or other pending legal news! If this happens just wait.
Buy low, sell high
I’m sure you’ve heard of the phrase “buy low, sell high.” While this may seem like a risky strategy to employ when investing in stocks or other digital assets that experience fluctuations in value over time, there is actually an intriguing way for individuals looking to do so with news.
One thing many people don’t know about the crypto market and how it works is its volatility; meaning prices can change substantially from day-to-day and even hour-to-hour. Though not always predictable (hence why some traders refer to it as speculation), those who are observant enough will notice trends where certain coin prices have consistently gone up after being down before – also known as a trend reversal.
Timing the market wrong could cost you huge profits. If a person invests in coins at any time other than when the price of the asset is low, they’re going to miss out on that nice high price point and will have less appreciation of an asset with more potential for profit from its general growth over time.
How long does it take to recover missed opportunity? It’s hard or impossible! There are even some investors who would tell people not buy anything until there’s been a big decline because we haven’t seen one yet so enjoy this bull run while it lasts but don’t invest your money now.
What happens if you give up to early?
One example is how you can be too early with your investments or not invest enough money when markets are low. Investing during these times will cause an individual’s portfolio grow more exponentially than if he/she invested at higher prices for stocks and other securities
One of the most famous examples of timing the market wrong is Microsoft stock. In 1999, a year before it launched Windows XP and years before its acquisition by Gates’ new company, Steve Ballmer explained to reporters that they were buying $150 million worth in shares from their employees every month because “We want our people to take some risk”
Final tips before you invest your money
You need to remember a few things before you start trading cryptocurrency or investing in the market. First, there’s no guarantee that any of your investments will turn out well – it all depends on how much research and time you’ve put into them beforehand.
Second, don’t be rash with what money is allotted for these endeavors; try not to use up too much at once because if something goes wrong then everything could go downhill fast from here! This means don’t put all your money into one coin. Consider diversifying into multiple assets for widest range of protection.
Third, make sure that when you trade bitcoin or other cryptos like Ethereum (ETH) you know exactly why you are doing so – this includes understanding which currencies have more potential than others and the risks involved.
There are thousands of coins and projects that exist today but this doesn’t mean they will be here in a few years. We have already seen dozens of projects disappear along with tens of millions of dollars of investment money from people that believed in a concept and idea that didn’t pan out.
Many consider it smart to invest in crypto but educate yourself and choose the companies and coins that fundamentally make sense and truly impact society in a positive way.
Start buying crypto in 3 simple steps
Buy, sell, and trade over 200+ cryptos with zero fees