I believe the current bull cycle is in it's late stages, I don't buy the current stories around this market. I am supposed to be fervently bullish according to what I read - 'The institutions now believe too, they're going to push prices will past $100k!' - So I should go along with what is painfully obvious and buy, right? I'd be dumb not too! But wait a second. I call on the wisdom of Howard Marks yet again, he generously shared the following idea which is lovely in it's clarity:
It's the inverse of the the market narrative that is the real trade signal--I'd hazard to bet this is true 80-90% of the time! But why? What kind of game is trading? It's ALWAYS about liquidity, that is the function of financial news as it operates on the psychology of market participants. The 'news' is essentially marketing for liquidity. It's all about influencing orderflow.
When the market needs to exit, the news is positive and argues the bull case, when the market is building a core position, the opposite is true. The goal is market depth at the overall high and low of the cycle! If I bought at $10 from a desperate seller, I'm going to want to sell at $20, 30, 40 to a very motivated and happy buyer. This is the game of trading and the meaning behind buying low and selling high, the truth is that it's emotionally painful to actually execute because to do so runs contrary to our psychology.
My guy tells me we'll see
25K
again and the cycle will repeat. The curious thing about crypto from my perspective is the amount of people who understand it technically and therefore believe in it's value. I apologize for being controversial, but I think this is a weird trap, it's super important to zoom out a little and see who you're buying/selling to and understand what the incentives are in the big picture.
Luck be with you all!
Everything important in investing is counterintuitive, everything obvious is wrong.
It's the inverse of the the market narrative that is the real trade signal--I'd hazard to bet this is true 80-90% of the time! But why? What kind of game is trading? It's ALWAYS about liquidity, that is the function of financial news as it operates on the psychology of market participants. The 'news' is essentially marketing for liquidity. It's all about influencing orderflow.
When the market needs to exit, the news is positive and argues the bull case, when the market is building a core position, the opposite is true. The goal is market depth at the overall high and low of the cycle! If I bought at $10 from a desperate seller, I'm going to want to sell at $20, 30, 40 to a very motivated and happy buyer. This is the game of trading and the meaning behind buying low and selling high, the truth is that it's emotionally painful to actually execute because to do so runs contrary to our psychology.
My guy tells me we'll see
25K
again and the cycle will repeat. The curious thing about crypto from my perspective is the amount of people who understand it technically and therefore believe in it's value. I apologize for being controversial, but I think this is a weird trap, it's super important to zoom out a little and see who you're buying/selling to and understand what the incentives are in the big picture. Luck be with you all!