Understanding the Market Sentiment is KEY to BIG WINS! I made millions in profit by this very simple knowledge.
In the market there are 2 major types of investors.
1. Value Investors
2. Traders
In binance, we can see both groups. Some people do both. Some only do one.
I’m gonna explain this is a very simple way. Imagine you are investing in Real Estate in Dubai. There are various options. You contacted with a broker and he said this area of Downtown is very hyped and you will make a lot of rental income. You fall for it and bought it.
On the other hand, your friend instead of going to a broker, first he did research like where are the metro stations, which place will be close to all important places, where could be possibly next big project. Then he meet multiple brokers and tried to get the best deal. As the place is not hyped, he bought at fair price.
Suddenly, due to harvey storm and unpleasant weather conditions panic sale started. Market started to crash. You also sold because there is no hype anymore.
On the other hand, your friend didn’t panic. Because he is there for long term. He is waiting for next 30 years and then he will think about gain or loss.
Here you are a trader and your friend is value investor.
Although short term hyped market is controlled by sentiment of traders, long term market is largely based on sentiment of investor mindset.
So, even same news can impact the market in two different ways. For example, if Dubai government declares that there will be no zoning and anyone can rent residential units for commercial purposes. The market will be hyped and everyone will be buying residential properties to make it commercial.
But the value investors will start to pull out the money as with this decision overall real estate market in Dubai will be collapsed in future.
Remember, for the good projects like $BTC, $DOT , $ID every time traders sells the assets and dumps the market, more and more value investors gets in utilising the opportunity.
So, what you wanna be? Trader, Value Investors or Both?
