Market force and volatility is something I often find little discussion about online. Everyone loves to blame some unknown force when trades don’t move their way, even though the entry was far from ideal.
Something I’ve noticed is people often forego any principles when the market becomes bullish. It’s interesting that when it’s bearish we tend to be rational but hopeful. Bullish… well we all know #moon #lambo
The one fallacy I see time and time again is the minute BTC moves in an upwards direction for some period of time, people are quick to dismiss the fact that we are in a bear market / sideways etc.
Every market has ups and down and any coin will only ever move so far, before needing to return for a break.
Why does this happen? It simple. When an elastic band expands too far the forces of physics will eventually see it contract, unless an equal or more powerful force holds it there.
The market works the exact same way. Retail investors can only ever extend the band so far before contraction must occur. The only entities in this world are institutional investors who have the power to shift the market in a given direction as I’ve covered above.
But even so the market will always return to its natural order. Force in the market can be defined as breaking out from compression and organic movement ensues that creates a well defined trend, but it will always return to where it needs to be if that force isn’t constantly applied. Here are some examples:
BTC bull run, breaking far above the markets normal behaviour – closes outside the red band:
The point is, that no coin will run forever, we have events that break out from the norm but these are black swan events, their likely hood of occurring minuscule in all honesty.
So always take profit, respect the market and don’t be blinded by pumps. Trade to your framework and you’ll beat the market every day of the week.