Many believe that in matters of personal economy and the economy of countries, money and knowledge mean everything, and although both are a fundamental part of being able to succeed economically in any field that we may be stepping on, it is not the only thing to take into account, because in this sense, intelligence and the ability to react and proactive also influence.
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The "FOOL" in economics
The "FOOL" in the economy, is a dynamic that I have named thus alluding to what many in Poker know as the "Golden Rule never said before"; which is that if in a game of Poker you are not able to identify the " FOOL" in 5 minutes, then the "FOLL" is you.
The same thing happens in the economy of nations, only that there, in order to identify the "FOOL", we must be very clear about who are the strong and the weak (economically speaking) and based on this, we can create strategies and intelligent movements that allow us to improve our economy and achieve financial success.
Generally, in such a scenario, the "FOOL" is anyone who is left with money held in their hands and does not put it into properly production. That is, the "FOOL" is, in such cases, any person who has fiat money and does not invest it or put it to generate more income; because everyone knows that when you have fiat money and it doesn't move, it stagnates (like dirty water), and then, it devalues and depreciates (due to the effects of inflation), in addition to spending more and more.
And anyone who knows economics and business in general knows that between investment and spending, what should be promoted are investments, because investments (as we well know) imply the possibility of a return on money, but expenses do not imply more than expenses; that is, disbursements of money with no possibility of return or profit.
Anyone who knows that if his money is not invested, he will become the "FOOL" of the game, is capable of understanding how important proactivity is, and intelligent work in that regard.
The "FOOL" in trading and investing
But it is that the dynamics of the "FOOL" is not only relegated to what I have just explained in the previous section; it also refers to what can happen in trading and investments.
Let me explain myself; If a person trades cryptocurrencies (for example), but does not do the necessary fundamental and technical analysis, and also does not manage their trading capital correctly and, incidentally, does not define clear "Take Profit" and "Stop Loss" levels and it don't respects them, then he will surely become the "FOOL" of the game; because he will end up losing all the money he puts on the market.
The same thing happens with investments, because if someone decides to invest in an asset or crypto asset and does not investigate all the factors that can affect the price and value of the asset in question over time, they are doomed to failure and loss of your investment capital; and therefore he will end up being the "FOOL" in the market dynamics.
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How not to be the FOOL?
An example of fools in both trading and investment, happened recently with the case of TERRA (LUNA), simply, many people decided to trade and invest in a cryptocurrency that seemed to be solid, because it had strong fundamentals (or at least that's what it seemed to the naked eye); but in reality it was a project and cryptocurrency that was falling apart and about to go bankrupt.
All the thousands of people who lost money because of what happened with TERRA (LUNA) ended up being the "FOOLS" of the game. And eye, I clarify that I am not saying that they are "FOOLS" in a pejorative sense, but from the point of view of the explanation of the dynamics of the "FOOLS" that I am doing to them; and from the point of view that they ended up losing all their money because of the debacle of the mentioned project and cryptocurrency.
But... How could someone anticipate the debacle and get away in time? There is a very simple rule for this, and it applies not only to identify projects and cryptos that can go down the drain at any moment, but also to anticipate possible changes from bullish to bearish trend in the markets (especially in the cryptographic ones). The rule is very simple, when everything seems too good to be true, it is that it is not; and when everyone (or almost everyone) seems to be happy and making profits in a project or cryptocurrencies, it is because you have to be very alert to a probable debacle.
Basically, it can all be summed up in one simple statement such as "When there don't seem to be any 'FOOLS' in the game, that's when everything can go off the cliff and almost everybody can end up losing money."
This has happened in the case of the total debacle of TERRA (LUNA), but also in the case of many other crypto projects in the past. However, it has also happened time and time again in the crypto market in the case of changes from bullish to bearish trends, and especially in the spot markets.
Let me explain, an example of this happens when someone trades some cryptocurrency in the spot market because it is in an upward trend, and so on sees how from that moment on the trend reverses and ends up losing all their funds in the process. What was this due to? Well, to many factors, but mainly to the mistake of entering a moment in the market in which everything was overbought, for not doing a competent basic technical analysis of the asset in question.
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That said, it should be clarified that both in trading and in investments (basically, in any form or type of business that may exist) there will always be "FOOLS", because they are essential components of the market, because there will always be someone who loses so that others can win; and although it sounds like a scam, it is not exactly about that; but about the fundamental dynamics of speculation in the markets.
In other words, this is something that has happened, is happening and will always happen in any market susceptible to speculation (such as the stock market and the crypto market, for example); so they are legal businesses. Therefore, the "FOOLS" in the markets are all those people who end up losing all their money in the speculative game; and it is precisely what we must try to avoid at all costs in anything we do, that is, we must always try to avoid being the "FOOLS" of the game.
But it is a fact that we all have been, are and will be "FOOL" at some point when we are in this speculative game of business, trading and investments, but the point here is not to make being "FOOLS" as a habit, but be aware of the circumstances, learn every day to be better and try to make the best possible moves in any situation in the markets with the trading and investment capital we have.
Because in the markets, although it hurts many to accept it and cannot recognize it, not everything is a "WIN-WIN" relationship, so there is always someone who loses so that another can win. The market does not create money out of nothing, but money comes from somewhere; simply, the money you earn at a given time is because someone else lost it in the dynamic. In the same way, the money you lose in the markets, someone else ends up winning.
What happens is that in the stock and crypto markets, the winners and the losers, due to the nature in which they interact, never knowing each other; rather, purchase orders marry sales orders, and profits and losses end up occurring in the process while the law of supply and demand causes prices to rise and fall respectively.
What happens is that in the stock and crypto markets, the winners and the losers, due to the nature in which they interact, never end up knowing each other; rather, purchase orders marry sales orders, and profits and losses end up occurring in the process as the law of supply and demand causes prices to rise and fall respectively.
This is why any person who enters to invest and trade in any market must be aware of all these things, that is, they must be fully aware of the level of risk to which they are exposed in the markets, and the fact that they can lose everything in the process. This is why any person who intends to trade and invest must do so under their own conviction, decision and responsibility; because this is vital. I mean, any person who wants to make trading and investments on the market should knowing the game's rules.
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Summary
As you can see, being the "FOOL" both in economics and in business is something of the most risky financially speaking. Basically, we always must do everything we can to avoid being the fool of the dynamics of the markets, and even then, sometimes we will not be able to avoid it.
As a general rule, any person who does not know how to invest their money or their cryptographic funds will end up being the "FOOL" of the game; but so will be the person who buys or retains any asset, good or property that is not financially convenient to retain, And this is something very important to keep in mind.
The "FOOL" of the economy is the great loser of any financial scenario, and therefore, we must avoid at all costs habitually becoming one of them if we want one day to have success in business and financial and personal wealth that we long.
Basically, it can be said that the more reluctant we are to learn everything we should know and we refuse to learn how to act in the markets, the more likely we are to become the "FOOLS" of the game. Therefore, let's avoid it by always preparing ourselves, learning more about trading and investments every day and learning everything we have to learn and know to be successful in the markets.
What do you think about the topic discussed? Please comment.
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