There was a market crash in both Crypto as well as Stocks, I have lost around 30% in the crypto whereas around 10% in the stock market but again that loss is not the actual loss because I have never sold any of my holdings. I know this is just a passage where people who are panicked sell are the losers and not the ones who are Hodlers.
The problem with inexperienced investors is that they freaked out and sell their stocks at the worst possible time, but I am not blaming them too because they wanted to cut their losses as much as possible. Not all investors are long term investors, few are just playing the margin, future or options for them the loss is much bigger than ours. And the momentum investing taught us that we should cut our losses as much as possible which means if there is a wrong trade we should exit it as soon as possible rather than just averaging it out.
But what we have seen is that market have recovered a but, i.e. both crypto and the stock market. if the investors would have waited one or more days, they would have recovered their losses. But those investors who sold out permanently are actually lost their money. I know writing about it after the events is much easier than thinking about it at that particular time.
But the fact is one bad day or one bad week does not make the stocks go zero or we cannot say that crypto is a bubble (people actually start calling it), it is how the market works. This is where the risk is, where when the rewards are higher in Bitcoin, the risk is higher.
It's easier to get caught up when the news around you suggest what to do, but the news always shows the worst-case scenario. The probability of a worst-case scenario is very low and thus it has an equal probability of a best-case scenario. We just have to walk away when the market is not going our way and thus when the storm calms we have to look at the charts again to know what to do actually.
This is where I have never panicked sell i.e. if I buy stocks or coins and I know it has a huge potential then even if it is going down by 10% does not affect me much because I know in the future it will obviously give me good returns. Even though I am not an active trader but still I would have done the same thing even I would have been a trader.
Posted Using LeoFinance Beta
This is basic things just making up minds for upside down ride till we derive a good profits out of it.
That's absolutely true, making up minds as well as do the best thing is always good to get good profits.
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