While at work I happened to spy out of the corner of my eye a little bit of a dip in the markets - I find it pretty crazy how much "technical value" can be wiped out of my portfolio in such a short time without me panicking.
Just before seeing this, I was talking to a colleague about fears and explained to him my process of psychological pyromania, where I mentally simulate worst case scenarios and try to find ways out. When I do find a potential bridge, I burn it down and look for another. I do this until there are no bridges left and I am trapped alone on an island, locked in a room with no doors.
This is far from a pleasant experience, as I explore topics that are very personal, highly disruptive and are emotionally charged - and following them to the depth of potential worst case means "experiencing" them.
While not real and determined by past experience and imagination - they definitely evoke a lot of emotional discomfort. The mind is incredibly powerful when applied well or allowed to roam free and while easy to dismiss, it can imagine the monsters under the bed to such a degree that there are physical reactions - faster heart beat, sweating palms, a desire to hide away.
It is perhaps a strange game to play to watch yourself "bleed out" in your imagination across circumstances that one would never want to happen. Yet, as I said to my colleague, we have the ability to play roles in our life and we do - if we only practice playing the roles we enjoy and make us feel good, when the inevitable discomfort arises, we are unprepared.
Confidence isn't knowing what to do, it is knowing that in a situation, the skills are there to be able to cope when not knowing. The simulations I run aren't about knowing more although they can help, it is about learning to manage my reactions and affect my default behaviors.
I have said before that my approach and probably a good approach to investing is to assume that whatever is invested is already lost - meaning that anything from that point up is not the worst case scenario. I am sure other people say they do this, but have they really prepared for the total decimation of their investment? Unlikely, as that situation is unlikely to occur - but it could.
I know that at times of large dips (this is a small dip) people tend to panic and act far more erratically than they would normally, but perhaps this is because they haven't practiced a "normal" for the negative circumstances, it is left up to chance. And normally fears will arise and the monsters under the bed seem larger and much more real - and the body reacts in a fight or flight response or perhaps a third position of frozen.
Sometimes of course, it is better to walk away and get some space if the panic means acting irrationally, acting in ways one wouldn't want to act in better times. But it is hard when one feels that they are bleeding out and all they want to do is stem the flow.
When it comes to investing, everyone is built for the good times - the heroes are are mad in the bad.
Which are you? Just imagine it.
Taraz
[ Gen1: Hive ]
Posted Using LeoFinance
Being calm and thinking long term is the only way to manage your investments.
There's this twitter account I follow, he always posts graphs and titles "when in doubt, zoom out" :)
Yep. Resolution matters. We tend to focus on single pixels.
!ENGAGE 15
ENGAGEtokens.The method you're describing is what stoics do.
I haven't read much about stoics or any philosophy, but i have a friend who is pretty into it and has aftwn mentioned similarities in some of thoughts.
These ideas float around in the culture. We are not as original as we think.
Also through experience - we tend to experience similar things and reach similar conclusions.
Yep.
!ENGAGE 15
ENGAGEtokens.What's the worst thing that can happen? It's a question I ask all the time in all circumstances.
I want to know the very worst going in. It's pretty easy to respond to less than optimal circumstances. And if the very worst happens I already know what to do.
I see the people respond to the daily charts every day. Down 1% and it may never stop. Up 1% and the next stop is over the moon. Repeat daily. It's amazing to me...
And the more terrible we make the simulation, the lower the likelihood it will happen - means that we are prepared across the spectrum.
The daily ups and downs tend to get to people - but next week, month, year seem so far away.
!ENGAGE 15
ENGAGEtokens.It's good to have a worst case scenario just for the mental exercise, but I think it can be overwhelming to sit and analyise it for far too long
once done, let it go and hope that the prep was enough. For me personally however, I find it relaxing.
Yes,I can understand why, you are a great thinker
My fear reactions seem to have been replaced by irritation/exasperation at some point which is great as it lets me actually react to things and bad because I look like a heartless jerk to other people XD
haha yeah. once the fear is gone - a lot of idiots remain.
That's me ;D
My take on investing is that the money is sacrificed. Its gone the second you invest it. That way it can only get better. Any gains even minor are good. If you're going to invest it you better make sure you can afford to loose it. That its disposable income and not something youre depending on working out or not.
People take risks on the hype and then wonder why they lose the farm
It is kind of funny, on Sunday I was thinking about sending some of my HBD to ionomy and selling it for BTC, and let it sit for awhile. I got busy and never made the transfer sale. About a month and a half ago I did sell 40 Hive there, at a higher price and last week finally reconverted it to hive when it went to 0.25, so I did make 3 hive overall on the sell transfer, not a lot, but some. When it goes back above about 35 I will trade it out again, and let it sit and wait for a drop and maybe get another 2 or three hive.
I know it is not big numbers like most are use to investing and hoping, but for me it is still just a little bit to play with. Since my view is extremely long term considering other peoples crypto idea of long term. When I do get ready to convert to fiat I will have more Hive than I have now.
I think a nice thing about dips is that until the very last dip of all dips, there is always a rise back up that is if it was not the final dip and death of a token.
if you look at it percentage wise, it is not a bad trade :) Ionomy has very little volume though I think.
A lot are in a rush hoping they can get in and out quickly. The long term players know, there is no "out" :D
I think for many projects at the moment, they aren't going to die yet - but once mainstreaming happens, few will survive.
You have to just believe that your crypto is worth zero and just have fun. It is the only way to live. Every now and then cash out a little when everyone is saying moon.... buy a car or a house and stuff like that. Live Free, be happy. Always.
it is a challenge for me (probably many) to cash out (maybe just me :D ) I enjoy the game though.
This seems to be the theme of the day. I also found myself philosophizing of my reaction to the selloff today. My main takeaway is the value of equanimity and gratitude for a longstanding meditation practice! (Plus having cash on the sidelines I could put in and some coins I was happy to reallocate. Hope heals too.)
Yeah, I did a little reallocation of something that was "up" (massive loss - old bag) into something I wanted more.
Well, I need some practice, definitely, in not getting caught emotionally unprepared. And It won't be achieved until I allow losses. Freely and without fear.
So...let's see under whose control the bleeding shall go on...
Emotional unpreparedness is not just for us as individuals, but as our place in the community. The highly emotional do a lot of damage and feel justified by their feelings.
I don't know who i am but I madly rushed into buying some btc in this dip. I have not yet figured out how to efficiently read the candlesticks. But, I know that this is a dip where I can begin testing the water.
It is worth doing the tests and seeing what is going on, how it works and how you feel about it all.
Yeah, that is the intention. Let's see if my decision based on my analysis is worth trading.
:)
I'm not here to get rich. I'm here to get my grandchildren free.
It is going to get rough between now and then.
Unavoidably so, unfortunately.
I think your approach is much better than my. After all, if from the beginning you lose everything (mentally), then no partial losses will be terrible.
Personally, I am always looking for an opportunity to minimize losses at the 50% level. This is my psychological level with which I am still ready to measure.
I still act to minimize, but accept that I might jnot be able to effectively :)
psychological pyromania sounds like a good practice. I've practiced more physical worst case senerios such as fasting and whatnot. Something I picked up from Stoicism. So often what we think is going to be difficult is nothing at all when actually experienced. After you know that it all becomes so much less fearful.
Yep - looking back, most of life is easy - looking forward is the challenge :)
It is making sure there is some available resources for the bad times. Saving for a rainy day to invest for the sunshine.