The other day we posted an equally important training material 👉Why is it important to take profits in parts? - be sure to study it.
Today we are posting equally important educational material. Subscribe in advance and let's get started!
People usually come to the crypto market for big
opportunities and they really are here.
The profitability in the crypto market is much higher than in the stock or any other market due to low liquidity.
Low-liquidity coins can grow by hundreds and even thousands of%!
This is an ideal testing ground for increasing capital.
But this market, like all others, has a very important feature... 🟡
We write very often about the Fear and Greed Index, as we consider this indicator to be one of the most important 👉How does the fear and greed index work?
✅ It's actually very simple. There are only 3 states: fear, greed and a period of stagnation (sideways).
Most people don't understand this, which is why they make a lot of critical mistakes.
Let's understand these market conditions:
1️⃣ Fear
This period should always be used to maximize your position.
Why?
The fact is that fear in the market does not appear out of nowhere; it is almost always created artificially through manipulation in the media.
The point of the manipulation is to make you sell assets at the very bottom in the negative.
It is important to understand that when you sell in fear, there is a large whale sitting on the other side of the terminal who manipulates your emotions and is happy to buy your assets for a song 🐋
All beginners sell on fear, but in order to make money in the market, you need to buy exactly when it’s scary.
Think for yourself, what will happen to the price when everyone who was afraid will sell and the news background will subside?
You can make big money only if you bought on fear, usually after a deep correction.
Moreover, the ideal entry point would be at the stage of extreme fear.
2️⃣ “Stagnation” or “accumulation”
After clearing on fear, when all the fearful ones have already sold, a period of sideways begins.
Large and experienced traders use this time to increase their positions.
In a sideways trend, large players keep the price in a certain range and do not allow the price to rise or fall above or below a certain level.
At this moment, whales accumulate or unload their positions 💼
Typically, such a period can last for months or even years, depending on the stage of the market.
And the result of such a sideways movement will be a sharp impulse exit up or down (most often up).
3️⃣ Greed
This is the best period
where you can earn a huge amount of money (if you did everything right before).
If you have more or less decent capital, then during this period you can make a fortune and live on it for several years!
During a period of greed, assets grow at an incredible pace, although you yourself may have seen this recently.
All our positions have increased significantly 🚀
But it is important to understand that when this stage goes from ordinary greed to extreme greed, it is time to leave the market.
According to our strategy, “good times in the market are given in order to prepare for difficult ones.”
Therefore, when everyone buys en masse, we, as a rule, take profits as they grow.
✔️ So we understand the three stages of the market. Moreover, 2 of these stages can reach extreme values.
The most important thing to do during periods of extreme fear is to buy. In periods of extreme greed, sell. It's simple.
This is the only way you can make big money in any market.
BUT 90% of people sell out of fear and buy out of greed - this is why the majority lose money and this is the biggest mistake you can make.
To maximize the consolidation of all of the above in your minds, below is a chart of the SOL and KAVA coins.
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