John Templeton said: “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.”
Understanding this concept will make you money.
Here is my market’s psychology analysis and how candlesticks play with people’s emotions.
1/21 🧵👇
Understanding this concept will make you money.
Here is my market’s psychology analysis and how candlesticks play with people’s emotions.
1/21 🧵👇
1.
~ Wall Street Cheat Sheet ~
I'm sure that you have seen plenty of times this chart.
It's the classic market psychology chart that shows the correlation between price action and emotions involved during a financial market cycle.
The level of accuracy is truly incredible.
~ Wall Street Cheat Sheet ~
I'm sure that you have seen plenty of times this chart.
It's the classic market psychology chart that shows the correlation between price action and emotions involved during a financial market cycle.
The level of accuracy is truly incredible.
2.
We can find similarities in a lot of charts, both for the traditional and the cryptocurrency market.
$EGLD is a perfect example of where each phase of the cheat sheet has been achieved.
Impressive the similarities, aren't they?
We can find similarities in a lot of charts, both for the traditional and the cryptocurrency market.
$EGLD is a perfect example of where each phase of the cheat sheet has been achieved.
Impressive the similarities, aren't they?
3.
~ Delusional Bear’s cheat sheet ~
The classic version of the cheat sheet has been re-adapted to the bear cycle, and works perfectly as the original.
We have different phases with different emotions depending on the moves.
Downward ➩ euphoria.
Upward ➩ fear.
~ Delusional Bear’s cheat sheet ~
The classic version of the cheat sheet has been re-adapted to the bear cycle, and works perfectly as the original.
We have different phases with different emotions depending on the moves.
Downward ➩ euphoria.
Upward ➩ fear.
4.
That's why it's important to maintain control over our emotions.
Because everything is part of a cycle.
It doesn't matter the way, bull or bear.
You just need to know that, at some point, the bear will finish and the bull will start again.
And vice-versa.
That's why it's important to maintain control over our emotions.
Because everything is part of a cycle.
It doesn't matter the way, bull or bear.
You just need to know that, at some point, the bear will finish and the bull will start again.
And vice-versa.
5.
~ The Iceberg Illusion ~
The Iceberg Illusion is a deception in which only a small perceptible part of a much larger perspective is visible (the tip of the Iceberg).
The remaining 90% of the iceberg contains hidden underwater parts necessary for the iceberg to emerge.
~ The Iceberg Illusion ~
The Iceberg Illusion is a deception in which only a small perceptible part of a much larger perspective is visible (the tip of the Iceberg).
The remaining 90% of the iceberg contains hidden underwater parts necessary for the iceberg to emerge.
6.
People see the illusion:
• Money
• Luxury vacations
• Cool stuff
But they don't see:
• Discipline
• Sacrifices
• Perseverance
• Risks
And this becomes a key factor to drive the masses into financial markets.
Because it gives the perception that making money is easy.
People see the illusion:
• Money
• Luxury vacations
• Cool stuff
But they don't see:
• Discipline
• Sacrifices
• Perseverance
• Risks
And this becomes a key factor to drive the masses into financial markets.
Because it gives the perception that making money is easy.
7.
This kind of short-term mental attitude reflects financial markets and common life.
Newcomers buy the riskier periods of a bull market because they don't have to wait.
The candles that everyday flow in are the “motivation” to buy more.
1-month maximum to wait for gains.
This kind of short-term mental attitude reflects financial markets and common life.
Newcomers buy the riskier periods of a bull market because they don't have to wait.
The candles that everyday flow in are the “motivation” to buy more.
1-month maximum to wait for gains.
8.
~ Charts & candle analysis ~
~ Mark up ~
At each new green candle, there is a sentiment that comes in.
A new level of greed consumes human behavior.
Echo chambers and Dunning-Kruger effect do the rest, making people compulsively buy more.
~ Charts & candle analysis ~
~ Mark up ~
At each new green candle, there is a sentiment that comes in.
A new level of greed consumes human behavior.
Echo chambers and Dunning-Kruger effect do the rest, making people compulsively buy more.
9.
~ Mark down ~
With the same method, at each new leg down, a new sentiment presents itself.
People don't want to detach from their dreams and always find a way to justify a dip, until it's too late and they decide to join the “mass belief” that new lows are coming.
~ Mark down ~
With the same method, at each new leg down, a new sentiment presents itself.
People don't want to detach from their dreams and always find a way to justify a dip, until it's too late and they decide to join the “mass belief” that new lows are coming.
10.
Let's take a look at the BTC double top.
Did you see that fat green candle on the daily?
What do the greedy see when price is breaking the $60K ATH?
Fairytales: adoption, whales buying etc.
That candle is perfectly intended to make people believe in these things.
Let's take a look at the BTC double top.
Did you see that fat green candle on the daily?
What do the greedy see when price is breaking the $60K ATH?
Fairytales: adoption, whales buying etc.
That candle is perfectly intended to make people believe in these things.
11.
Inexperienced guys aren’t able to watch at HTFs.
They don’t wait to see if the price can make a strong closure above or below that important 60k mark.
All they want to see are numbers going up, regardless of the sentiment/news/market structure.
Inexperienced guys aren’t able to watch at HTFs.
They don’t wait to see if the price can make a strong closure above or below that important 60k mark.
All they want to see are numbers going up, regardless of the sentiment/news/market structure.
12.
~ Candle effects ~
Green candles make people lose touch of reality.
FOMO, euphoria, gambling attitude..
The candles are intended to do this and disregard everything, especially how high the market has gone in relevance to the lows.
No patience ➩ buy more.
~ Candle effects ~
Green candles make people lose touch of reality.
FOMO, euphoria, gambling attitude..
The candles are intended to do this and disregard everything, especially how high the market has gone in relevance to the lows.
No patience ➩ buy more.
13.
Red candles instead have the ability to make you think that everything is bad, BTC is dying and projects are not delivering.
The prolonged time of a bear market has also the power to strengthen the situation, making you feel annoyed and doubtful of a future recovery.
Red candles instead have the ability to make you think that everything is bad, BTC is dying and projects are not delivering.
The prolonged time of a bear market has also the power to strengthen the situation, making you feel annoyed and doubtful of a future recovery.
14.
~ The hidden hand ~
Financial markets aren't pure.
They're made of sharks and hidden hands that try to manipulate and slaughter as many new participants as possible.
The so-called “exit liquidity”.
You cannot expect to play this game with your rules.
~ The hidden hand ~
Financial markets aren't pure.
They're made of sharks and hidden hands that try to manipulate and slaughter as many new participants as possible.
The so-called “exit liquidity”.
You cannot expect to play this game with your rules.
15.
This involves going against what we believe in.
I'm a strong believer in Bitcoin and the overall crypto sector, but I cannot sew my eyes on the fact that it is highly speculative.
Especially in a strong unregulated market, whales eat small fish.
This involves going against what we believe in.
I'm a strong believer in Bitcoin and the overall crypto sector, but I cannot sew my eyes on the fact that it is highly speculative.
Especially in a strong unregulated market, whales eat small fish.
16.
~ Mastering markets 101 ~
• Managing emotions.
This includes going against what we want.
The urge to buy.
The urge to sell.
There's no urge in investing, it needs to become a boring practice whatever the operation we're gonna make.
~ Mastering markets 101 ~
• Managing emotions.
This includes going against what we want.
The urge to buy.
The urge to sell.
There's no urge in investing, it needs to become a boring practice whatever the operation we're gonna make.
17.
• Dominating biases
Psychological biases are money killers.
Like many, I was eaten by these mind traps that led
me to horrible financial decisions.
I summarized the 10 most important ones so you can be prepared to face them.
• Dominating biases
Psychological biases are money killers.
Like many, I was eaten by these mind traps that led
me to horrible financial decisions.
I summarized the 10 most important ones so you can be prepared to face them.
18.
• Eco-Chambers resilience
Mass belief is the worst enemy.
Imagine it as the final boss of the game.
If you're able to detach from market sentiment and crowd opinion the prize that awaits you is huge.
• Eco-Chambers resilience
Mass belief is the worst enemy.
Imagine it as the final boss of the game.
If you're able to detach from market sentiment and crowd opinion the prize that awaits you is huge.
19.
• Experience
I can stay here 24H per day to warn you but you will be able to truly understand them only by experiencing them.
Fortunately or unfortunately.
Failures lead to massive growth, so take each mistake you make during your journey as a severe but helpful lesson.
• Experience
I can stay here 24H per day to warn you but you will be able to truly understand them only by experiencing them.
Fortunately or unfortunately.
Failures lead to massive growth, so take each mistake you make during your journey as a severe but helpful lesson.
20.
• Closures
Last but not least, candle closures.
As we saw, being able to recognize if a price closes above/below key support or resistance makes a huge difference.
That daily candle we previously saw, has closed below the 60k mark.
Analyze ➩ execute ➩ achieve.
• Closures
Last but not least, candle closures.
As we saw, being able to recognize if a price closes above/below key support or resistance makes a huge difference.
That daily candle we previously saw, has closed below the 60k mark.
Analyze ➩ execute ➩ achieve.
21.
That's it!
• If you liked this thread, follow me @IamZeroIka for more crypto insights.
• Like and RT the first tweet to support my work!✌️
• If you want to have access to deeper guides and info, subscribe to my FREE newsletter! (link in bio)
That's it!
• If you liked this thread, follow me @IamZeroIka for more crypto insights.
• Like and RT the first tweet to support my work!✌️
• If you want to have access to deeper guides and info, subscribe to my FREE newsletter! (link in bio)
Loading suggestions...