Of Diamonds Hands and Men

There are different types of HODLers. [The Rude Awakening] November 24, 2022 [WEBSITE]( | [UNSUBSCRIBE]( Of Diamonds Hands and Men - “Woe is me!” cry the HODLers. - But if you got in at $12, do you care? - Emotional aspects of trading. [Sad Because You Missed Out On The Crypto Boom? Your Timing Might Be PERFECT]( Because of the crash, super-valuable cryptocurrencies are trading for pennies on the dollar. Now is your chance to scoop them up… sit back… and let your fortune build. As I’m sure you can imagine, you need a different strategy to make money with cryptocurrencies today… [… and that’s exactly what you’ll find here.]( [Click Here To Learn More]( [Sean Ring] SEAN RING Dear Reader, Happy Thanksgiving! This is something I wrote back in May 2021. Crazy how things change. At the end of the piece are some trading tips that may help you. Enjoy! How You Feel About Bitcoin Depends on Your Entry Point “How are you feeling?” “Whore’s drawers, mate. Up and down.” It’s a common refrain in London and elsewhere in England. I always marveled at how non-American English speakers used so much more of the language, colorfully so than Americans. And that brings me to the Bitcoin Massacre yesterday. At varying points of the day and overnight, BTC traded at $49,500, $39,000, $33,500, $40,000, and now about $36,500. There’s no point in getting more precise than that. Just for a goof, I plugged those numbers into an Excel spreadsheet, and here’s what I got: Range: $16,000.00 Standard Deviation: $6,027.02 On the face of it, it’s an intolerable level of volatility. But for reasons I hope to make you understand, it’s just not that big of a deal for the “New Aristocracy.” Perspective is Everything - And That Means Your Buy Price. This is a chart of Bitcoin year-to-date. I’ve added the percent changes in there for clarity. If you bought Bitcoin on New Year’s Day and held it until mid-April, you would’ve reaped nearly 138% gains. How good you would feel! How vindicated! After that, the deluge (to butcher Louis XV’s phase…). From the mid-April peak until now, you’d have surrendered 43.1%. Ouch! You’re still up for the year, for sure, but it doesn’t feel nearly as good. And if you took out a loan to buy your Bitcoin, the pain you’d feel is palpable. As Sir Alex Ferguson would say, “It’s squeaky bum time.” [SJN] But we must put this into context. If you were an early adapter and laughed at the gold bugs as unintelligent Luddites, this year’s moves pale in significance to what you’ve already gained. I’ve left this year’s percent changes on the charts so you can see how irrelevant they are to people who bought in the low triple digits and below. [SJN] Let me quote a Facebook friend anonymously. He’s been in crypto since Day One, for all intents and purposes: “As I have stated earlier, a good shakeup after such dramatic rises as seen in the crypto markets over the past 12 months - is healthy. It shakes out the weak hands, it collapses leverage - and sends the casual and insincere partakers packing - potentially to Mars. Having been in the space since the very beginning, I am so infinitely tired of the experts and cheerleaders, who appear during bull markets, and who equally rapidly disappear again. To echo a much used quote: ‘Crypto needs no Kings.’” He also said he took the opportunity to add to his position. And why not? That’s exactly what Uncle Warren would do: [SJN] Ok, we can argue about the “solid business” bit. But Coiners genuinely believe that Bitcoin is the way forward. “Trading is the Act of Becoming Inhuman.” “Just buy low and sell high.” It seems so easy, but 97% of all investors lose money. That’s right, and they’re the donor class. They donate their hard-earned, after-tax income to those who’ve somehow figured out how to make money consistently in the markets. If you ask most traders, they won’t give you an indicator they use or the people they listen to. Traders talk about controlling one’s emotions, mindset, and continuous improvement. Here’s another thing Warren Buffett got utterly right: “If you can’t control your emotions, you can’t control your money.” This brings me to why Bitcoin volatility affects some more than others. Far from being some pedant lecturing you on how to keep a stiff upper lip - something Brits no longer can do anyway - I’ll share my journey from emotional basket case to (more) level-headed investor. [URGENT: Your $557 Credit Is Now Available.]( I am pleased to announce that you've got an immediate $557.00 credit for our research you can take advantage of… [Please click here immediately to learn how to claim this credit.]( **DISCLAIMER: Please note, this offer is limited to the first 1,000 that take advantage today** [Click Here To Learn More]( “If you’re so smart, why aren’t you rich?” Or at least richer. I often wondered why I didn’t have as big a brokerage account as I’d like. I worked as an institutional broker at one of the world’s largest investment banks and couldn’t build up my winter supply of acorns. I found comfort in what Renaissance Man and all-around genius Nassim Nicholas Taleb once wrote: [SJN] And funnily enough, as I approach my 30th year working, I’m getting much better at not losing it. But I needed to dig deeper to find out what I was doing wrong. Before I go there, let me say this: if you haven’t read any of Taleb’s books, you should. They help make sense of a crazy world. The books are Fooled By Randomness, The Black Swan, The Bed of Procrustes, Antifragile, and Skin in the Game. (Leave Dynamic Delta Hedging out unless you’re already a seasoned options trader.) A book I picked up, really enjoyed, and helped me was [The Mental Edge in Trading]( by Jason Williams, with a foreword by Larry Williams. Larry is a world-famous futures trader. Jason is his Johns Hopkins-educated psychologist son. I highly recommend it, not just to improve your trading skills but just to find out more about yourself. It relates the [Big Five Personality]( types to trading. I’ll explain what they are in a bit. After I had read the book - which took one sitting - I emailed Dr. Williams to ask him if he’d perform the Big 5 Personality Test on me. He kindly replied that he didn’t do that anymore, thanks to the flood of requests! But luckily enough, a newly famous Canadian psychologist put the test on the Internet. His name, of course, is Jordan Peterson. [Understand Myself]( is a great place to take the Big 5 Personality test cheaply. It costs $9.95, and to me, that’s nothing compared to what you can learn. The Big 5 traits are neuroticism, extraversion, openness, agreeableness, and conscientiousness. I won’t go through all 5, just the ones that are particularly relevant to trading. We’ll do this through my scores without TMI (too much information). To absolutely no one’s surprise, I’m highly extroverted. Abnormally so. I like to hang out, drink beer, tell jokes, and party the night away. But let’s define extraversion as a psychologist would: it’s sensitivity to good things happening. When good things happen, I feel really good. Also unsurprising to me was that I lack conscientiousness. Unfortunately for me, this is an essential trait for success. I’ve often bragged about being a “big picture” person, but when you lose the details, you lose opportunities. And when you take your eye off the market, it may take your head off in return. What was incredibly surprising to me at the time was my neuroticism score. It’s off the charts. Like you probably do, I defined neuroticism with a picture of a lonely woman with dozens of cats who keeps a wine glass in the fridge with a red wine bottle. But that’s not neuroticism at all. How do psychologists define neuroticism? It’s the sensitivity to bad things happening. It’s the evil twin of extraversion. And when things go wrong, I get sent down. I’m the complete opposite of one of my boyhood heroes, Joe Montana. Nothing ever bothered Joe Cool. I weakly wallow for far too long. [SJN] What does that all mean? Well, for one, I should come with my own VIX index! I get really happy and then really moody. And thanks to my lack of conscientiousness, I forget to do what needs to be done. Is it all bad? Absolutely not! In fact, taking that test changed my life because I knew exactly where I needed to improve. (And I stopped wondering how the heck I got into Mensa.) So here are some concrete improvements I made, thanks to this test: - I put take-profit levels on every trade I do. My extraversion usually means I don’t want the party to stop. So I’d get a huge dopamine hit from paper gains and, fatally, not close out the trade. Putting take-profit levels on every trade prevents this from happening. - I put stop-losses on every trade I do. My neuroticism usually means I get too miserable to close out the trade. I used to freeze and do nothing. Now I’m out of my trades when they’re losing. And quickly. - Thanks to my lack of conscientiousness, I put everything in electronically. That goes for reminders, lists, calendar dates, you name it. I rarely miss meetings now, let alone trades. Just those three little improvements have made an enormous difference. Heck, I just closed out a two-and-a-half bagger this week. It doesn’t mean I win every time. It just means I don’t lose most of the time stupidly. I hope you’ll pardon me if I overshared. But if you think you can improve your trading but don’t know how to start with you. You may be right there, closer than you can imagine, and just need a little tweak. [SJN] Until tomorrow, enjoy your turkey! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2022 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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