Overtrading

More experienced traders will tell you that conquering the emotional game is the hardest part of trading. As far as I can tell this is accurate. If mastering your emotions is the hardest part, then I can tell you that overtrading comes in at a close second. At least for me. The reason this warrants discussion is because of where we are in the market cycle. Let us refer to the following illustration that you are likely familiar with:

Now let us refer to a Tradingview chart of the SPY:

To me it looks like the traditional market is at complacency, let that sink in for a moment. Bitcoin trends with the traditional market the vast majority of the time. If you spend any amount of time on twitter/crypto twitter you have undoubtedly been seeing a lot of bear posting and frustration. Crypto isn't "up only" anymore and for many participants, this is all they have known thus far. So what is one to do? I don't know, I wish I did. I can only tell you what I am doing, and I will also tell you not to take this as any sort of financial advice. We all have difference risk tolerances, and risk is one of those things that will make us get all emotional in our trading/investing. Let us take a look at another chart:

This is Stacks. Stacks is a crypto currency that allows smart contracts to be run on Bitcoin. Have you heard of Ethereum? Stacks does what Ethereum does, except it does so on the most secure blockchain known to man. Based on the 2 charts, which one is the better buy right now? In my experience, it's Stacks. The SPY is in complacency on the back end of the largest bull market in recorded history. Stacks is sitting on firm support, and looks to be near the "anger" part of the market cycle. Stacks definitely looks more attractive.

So far we have covered that overtrading is bad, I will tell you some horror stories one day, what else have we covered? Oh yeah, you have to learn a little bit of TA. You don't have to be a guru to be a success in this space, but being familiar with the chart and a few concepts will give you an advantage over others. It will also help keep you from falling into FOMO cycles or trying to copy trade your favorite influencer (who already bought his positions, then told his friends, before telling you). Copy trading almost never works. Finally you have to have a plan. In the next installment of this series we will cover important considerations that go into your trading plan.

As of right now I plan on including an NFT in every post. This one is from the Mars Woman collection on Stacks. In the meantime give me a follow on Twitter @jackbinswitch. Until next time.