Jesse Livermore "opposite day-trading", using emojis.

FEAR (crash). HOPE (all will be ok). GREED (safety).
Red flag (Fear, take profit).

People in markets dominantly have two emotion. Greed and fear. Fear (FOMO, fear of judgement, fear of not being right (we want to be right, not make money), fear of failure or not being good enough). Greed (forcing trades, where there are none. Revenge trading. Not wanting to improve, etc).

According to Jesse Livermore. People are fearful and want to sell stocks when prices rally. We FOMO, when we miss the price action. And are hopeful, when prices go opposite direction. According to Jesse, You should be the opposite of your emotion.

Be fearful, when "hopeful".
Be greedy, when "fearful" ("everything going to zero").
Be greedy, when want to sell during break out profits.

Using Jesses tactic, I noticed often times there are conflicting emotion. ie greed and fear.
//Hope can work some time. And eventually make you bankrupt.
//When prices correct, you are both greedy and fearful. Eventually selling all, and missing out.
//When greedy and hopeful at low prices, that eventually is just a bear market, you lose all.

it's important to set your base theory right.

Trade active

"Positionally": where most people have POSITION and consensus is to BELIEVE
and where consensus is that thing flies to moon and there's no risk. Most people have position and things are easy.

Note

it make sense from "risk-reward" POV.

--Low prices is where it's easiest to lose fast (Fear, skeptical).

--Red flag, where shortterm price action (bearish candle) incentivizes to sell longterm positions (Fear, skeptical).

--HOPE is buying things prematurely, that has an uptrend. And always end in loses.

--Greed/Excitement is tricky, a strong trend that you want to sell, but should wait for conformations. Mistake is buying extensions, than build during Fear?

//I think these four "stages" explain the crowd and P.A. well.
//and gives you an idea how to act in oppose to your gut feel.

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Looks spot on. 🍀 - HOPE cycle. People lose money, before a better setup.

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🛑: You dont like losing money, so you dont build agg. positions. Because you lost building agg. during HOPE period.
🍀: You build agg. positions due to fear of missing out, because before this there was a strong trend. Which cause market to be very volatile?
🚩: skeptical due to short-term action, selling your long positions.
😂: not wanting to sell the good positions, even when cracks are visible. Because previously you sold but market still went up. People start ignoring bad news etc (price action could be positive).

Your emotions imply crowd/market emotions. Loop of a market cycle.

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the opposite of market emotion loop, would be:
-waiting at HOPE period? or buying small instead of agg. We see previous trend and therefor make mistake (cycles are counter intuitive?)
-Buying agg, but wise. during fear.
-ignore things during red flag and be cautious during strong trends?

Note

no patience during "GREED😂" corrections, market tops. Wanting market to do something.

no patience during "🍀HOPE" volatility and long stretches. That cause to give up right before "FEAR🛑"?

maybe even no patience during "🚩RED FLAG break-outs".

a loop.

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Howard Marks cycles.
FEAR🛑: cyclically most people turn pessimistic, skeptic?
🍀HOPE: people are optimistic, but bad technicals? S/D dynamic only turn bullish with perfect technicals?

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HOPE: is buying prematurely. a crowded fomo.
FEAR: is being too passive. crowded fear, after several failed market attempts? Maybe some psychological fear like news.

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HOPE: is buying when volatility havent subsided yet.
FEAR: is ignoring that volatility has subsided.

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common belief is that FEAR is when a marking is crashing? Greed, whenever something is "safe" (strong S/D).
basically GC, DC crossovers.

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Probably "context" maters?:
if there's a steep crash. --> it's tough to change crowd sentiment, beliefs. TRUST.

during strong, long bulls, people have a safe feeling.

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Markets have a sentiment cycle, between "SAFE", risk-on (trust) and danger (wall of worry, distrust) basically?

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I wonder if this holds true. BTC acts as if it's true. Markets act as if there was 50% chance to fall. Maybe broad market comes when the momentum is best. Loss of momentum = "fear"?

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this is more of a HOPE phase though. havent broke past the resistance.

citsvar

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