I had this thought thanks to a little discussion with @khazrakh about the difference in trading when you've already 'taken out' what you need and you're just playing with the excess, or trading with targets in mind, be that individual targets or managing an investment fund.
The former type of trading is going to be a bit more relaxed - you can take extreme risks with no worries and you can also leave your funds in bad-trades for longer, or just write off a portion of your losses with no worry, only the kind of irritation that someone losing a game would suffer.
It's a very different situation if you haven't already made it and you're trying to 'trade up' with a target in mind, then an unexpected dip is a dashed aspiration, a frustrating experience, a timetable put back, or worse a FOMO induced loss-sell inducer as you try to jump on the next profit making opportunity to make up your previous loss.
An analogy
I remember when I was a teenager, I got myself an MZ motorcycle and all the gear, passed my CBT and then thing promptly broke down.
This resulted in having to do some amateur diagnosis, which involved taking the entire engine apart - the mechanics are pretty basic on an MZ - but even so, this still resulted in a lot of grease and the living room being littered with engine parts for the best part of a week while me and a mate of mine tried to figure out how to put the damn thing back together.
During this time we visited an older friend of ours whose living room was similarly chaotic with a stripped engine - but this was his 'project trike' - he had is main bike up and running.
The DIFFERENCE between these two living rooms was minimal, but our state of minds were in totally different places - I was frustrated and just wanting to get my one bike up and running, relying on other people to drive me around, while here's my friend, mobile, and just having an enjoyable tinker building up his project bike, not a care in the world.
Same process, same environment, one person having a shit time, the other loving it!
That my friends is the same as the difference between trading if your poor and trying 'make' it' compared to trading if you're already rich enough and just tinkering, trying to make a bit more!
Well, unless your a poor trader with a very Zen attitude.
How many of us are just playing a game?
There are both kinds of people in the leo space and crypto space more generally, trading at different levels - it all depends what you're version of 'made it' is.
And for those of us that aren't there yet, I'm sure we'd all like to be in a place where we've cashed out what we need and we're just playing with the winnings.
(By cashing out I don't necessarily mean cashing out to FIAT, I'm more coming around to the way of thinking that this means stable coins yield farming, which, slight security risk aside (and something I need to research more) is as good as cashing our yer crypto and taking profits.)
If you do have the will power to cash out when you've made your target, which is easier said than done, I KNOW, then you can just start trading again but with smaller amounts - with $10K actively trading rather than, say $200K.
Then trading is more like a game, it's a whole load more fund and lot less stressful, and who knows, that lack of stress might just mean you make better trading decisions.
If you've got a significant chunk of your wealth tied up in trading back and forth, it's going to be a much more serious affair, a compulsion to monitor everything that's going on, fear of losing for real, which is precisely what makes it unplayful - when the stakes are real and there is the potential for genuine loss.
Here's hoping that many of you make your targets so trading can become a real game in the future!
P.S. I never did get that bike working, maybe that's a reminder to take SOME profit on the way up, just in case it all goes pear shaped, HARD!
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Well, I don't do much trading (although I am saving to get started soon), however, I believe trading from a place of abundance is always better. You make rational and better decisions based on your skills and knowledge. For those was are chasing profit from a place of lack/want, there is also a chance to make brass decisions based on fear or greed. So I would like to be in a position where I can play the market without having to worry so much.
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I think you might be onto something there - I think you probably are in a better space to trade if yer secure!
For me, I trade very infrequently, which means that I don't have to stress too much. The money is serious but I've been thinking about various aspects of crypto investing for so long and experienced so many losses down the road that I'm hoping that I have finally come to the right place emotionally.
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Sounds like a good strategy - the infrequent bit!
I don't really trade TBH - when I do it's typically to just shift coins about for a cheaper transfer fee, but I don't generally try to time the market.
I find it too anxiety inducing, i'm mainly just a buy and hold kind of guy - staking for returns is something that really appeals to me.
Also, getting into liquidity provision is another way to substitute trading as a way to make money. In fact, that's close to being the same thing. Liquidity pools are automatic market makers and by providing liquidity you participate in both sides of the trades while making bank passively. Of course, you run certain risks.
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I much prefer pooling to actively trading!
Game or not , you can't miss out on the thrill, it's a total sport! Why so serious 🤡
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Ooh I don't see trading as a thrill - more anxiety inducing for me!
Understandably so..would you have it any way else ?
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I'm currently doing it for fun and making pocket change profit. However, scaled up it would be a life changing amount of money.
I'm very aware of the risk that as soon as I start investing larger sums the bullrun could end. Because of this I'm playing it safe and waiting for the bears to have their way with the market before starting again with larger investments.
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Sounds like a sensible strategy, I'd be reticent about 'getting in' to crypto now. I guess that's what's nice about Hive and Leo, at least one can earn something!
Great analogy with the bike - the context is all that matters. As long as you can do things for fun, they rarely will become stressful for you. But if your (financial) well being depends on it, things are going to stress you out even if you'd normally enjoy it.
I've realized that especially when I started to manage funds for @alexandrabauer. It's just play money for her, but the moment I had to make decisions concerning a friend's money, things I love to do stressed me all of a sudden and I was a lot more anxious to make wrong decisions than what I am with my own money.
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Ooh I wouldn't want to be investing other people's money, even if they say 'it's fine if you lose it all; - there's still stress with that!
When you have made way more than you expected, way quicker than you expected thats usually a good sell signal. Capital preservation is the most important thing, also realise when your compulsive gambling rather than investing. Greed and impatience is your worst enemy. You dont have to make a million today or this week, plenty of opportunities will come down the pike, and when they do, you know you will make money rather than hope.
Very well said, I've made a point of limiting my crazy defi ventures to 5% of the crypto portfolio - I'm focusing on stacking stablecoins now, I can't think of a better way to preserve one's capital in Cryptoland!
Tether is your best friend, but remember we are in a bull market. You dont want to be bearish in a bull market and vice versa.
My current aim is to gradually shift about 8% of the current value in Stable Coins - that's about the perfect hedge for me - it's not a huge proportion and that's enough for me to have a nice chunk secure - not life changing, but for me enough to think 'OK that's nice'.
that sounds the right approach, tether a percentage on the way up to make you feel comfortable. Thats what i did in 2017, the way its going it either going to go on all year or end soon and become bearish. I think there is more probability its just getting started, 2021 will most likely make 2017 look tame.
I get the same feeling - I'm finding BSC and BEPswap pools quite an easy way of moving to stables - I've got various strategies, some of which pay me in crazy defi coins, so it's not even entirely bearish!
@jphamer1 yeah entering a right trade at the wrong time or the wrong trade at the right time will cause chaos so that is why one should buy when the market is bullish and be bearish when the market is bearish....
Funny thing, I was having a conversation with my girl the other day that led me to think about something similar. Although mine centered around values and stuff.
Once you can achieve your financial target, you can then start focusing on doing things, which includes trading, for the value of sorts that's not necessarily tied to financial gains.
At the end of the day, I think we're all just trying to get to that point where we can look at ourselves and say "we've defeated money". Then you can take a moment and focus on actually doing the things that make you happy etc
Very well said - all I've ever wanted is enough to be secure, which isn't that much TBH.
Beyond that point, earning more and more and more is just a bit empty for me!
You nailed it , this is one of reason that I do not trade. I do not feel that I should go out and trade with some couple of hundred Dollars because transaction fees will kill me, burden on making profit will be high.
Whether you trade with couple of hundred Dollar or thousand bucks , your research and homework will be same. So I am in opinion just get little more, secure your base little more before you can "test the waters" in trading.
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I agree - it's why I like staking coins so much, they feel a bit more secure and just earning a return for nothing!
Trading is a game. Hive is a game. Life is a game. Many don't seem to want to play anything other than games made to consume their time and return nothing.
Game on!
Unless you're addicted to the game, it's always better to be able to treat it as such. Otherwise it's probably worse than trading out of necessity.
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Very informative post. Thanks for sharing.