This newsletter is sponsored by PHEMEX, the only exchange that I use to trade crypto with leverage. Sign up with the link above and get some free Bitcoin. I really encourage you to check them out - you know that I never endorse a product that I do not use!Note: I have moved the charts back to the top of the newsletter. I have had a number of complaints about them being at the bottom and gmail truncating the emails. You can always click the link gmail provides to read the entire email.Markets Hate Uncertainty.There is an old saying on Wall Street that bad certainty is better than uncertainty. I find it very interesting that so many people are so certain about things that I simply am not. Trying to predict with any degree of certainty that which has no certainty, basis, or track record to go by, is a dangerous game. Yet so many retail investors engage in this regularly. You constantly see traders telling what is definitively going to happen in the future with assets price or the economy, as if they have a crystal ball. We all know by now that predictions about price, news, how the market will react to said news (Fed raising or lowering rate, for example) can never be made with any degree of certainty.There is another phenomenon called "market jitters" which is often a result of uncertainty. "Market jitters" is a colloquial term for an elevated state of anxiety and perceived uncertainty about the economy or a specific asset market.Market jitters often involve not only risk (known or estimable factors that can be priced in) but true uncertainty (unknown factors whose risk or probability cannot reliably estimated). Efficient markets may be able to handle risk well and adjust well to changing risk across various asset classes, but uncertainty is more difficult or impossible to accurately price. Though uncertainty by its nature cannot be factored into prices, economists have devised ways to estimate the general perception of uncertainty in an economy. They use measures of asset price volatility, the dispersion of forecasts of economic performance among major forecasters, and the frequency of media mentions of terms related to uncertainty. Time periods when these measures are elevated can be considered episodes of market jitters. Psychological factors often end up playing a role during periods of heightened uncertainty, which can lead to high volatility, dramatic price swings, and market instability. Keynesian economics refers to these types of factors as "animal spirits" due to their perceived irrationality. In a worst case scenario, a market may experience a setback purely as a result of market jitters, if the sentiment devolves into general pessimism. Markets are presently uncertain. All markets.What does that mean for us?That it is likely a good time to remain on the sidelines as traders, watching and waiting for more clarity.We have endless news that is driving the uncertainty, from Trump and his cohorts contracting Covid to the FCA in the UK banning crypto-derivatives. We have an election, a time when markets are historically uncertain and difficult to predict. Nobody can confidently predict what is coming in the next few weeks and beyond.My goal with this newsletter is to help you become a better trader and investor. The first rule of trading is to preserve your capital. The second rule is to grow it. I take the first rule very seriously, and try very hard to avoid posting trades in an uncertain market.Patience is a virtue. Let's see what happens.IMPORTANT UPDATE, PLEASE READ!To add value for you guys, I have decided to try livestreaming your chart requests! As you know, I accept requests on Wednesdays from 8 AM to 1 PM EST - you can reply to this email with requests. I take one request per person, per week.Each week, I will now go live on youtube (http://youtube.com/scottmelker) and looks at the assets that you request. I believe this will help you see how I approach the charts. This will start tomorrow and I will share the video on Thursday for those who missed it.Be sure to check out my website! There’s tons of educational content and news.https://www.thewolfofallstreets.io/In This Issue:Bitcoin Thoughts And AnalysisIntoTheBlock: Current State of BitcoinAltcoin ChartsLegacy MarketsTrade Management Case Study - ANKRDiginex Is The First Crypto Exchange On NasdaqAll Stocks Could Be TokenizedBitcoin Pledged To Each CongresspersonThe SEC Catches Up To John McAfeeThe Wolf Of All Streets Podcast Ft. Mike McGloneMy Recommended Platforms And Tools
The Wolf Den #101 - Markets Hate Uncertainty
The Wolf Den #101 - Markets Hate Uncertainty
The Wolf Den #101 - Markets Hate Uncertainty
This newsletter is sponsored by PHEMEX, the only exchange that I use to trade crypto with leverage. Sign up with the link above and get some free Bitcoin. I really encourage you to check them out - you know that I never endorse a product that I do not use!Note: I have moved the charts back to the top of the newsletter. I have had a number of complaints about them being at the bottom and gmail truncating the emails. You can always click the link gmail provides to read the entire email.Markets Hate Uncertainty.There is an old saying on Wall Street that bad certainty is better than uncertainty. I find it very interesting that so many people are so certain about things that I simply am not. Trying to predict with any degree of certainty that which has no certainty, basis, or track record to go by, is a dangerous game. Yet so many retail investors engage in this regularly. You constantly see traders telling what is definitively going to happen in the future with assets price or the economy, as if they have a crystal ball. We all know by now that predictions about price, news, how the market will react to said news (Fed raising or lowering rate, for example) can never be made with any degree of certainty.There is another phenomenon called "market jitters" which is often a result of uncertainty. "Market jitters" is a colloquial term for an elevated state of anxiety and perceived uncertainty about the economy or a specific asset market.Market jitters often involve not only risk (known or estimable factors that can be priced in) but true uncertainty (unknown factors whose risk or probability cannot reliably estimated). Efficient markets may be able to handle risk well and adjust well to changing risk across various asset classes, but uncertainty is more difficult or impossible to accurately price. Though uncertainty by its nature cannot be factored into prices, economists have devised ways to estimate the general perception of uncertainty in an economy. They use measures of asset price volatility, the dispersion of forecasts of economic performance among major forecasters, and the frequency of media mentions of terms related to uncertainty. Time periods when these measures are elevated can be considered episodes of market jitters. Psychological factors often end up playing a role during periods of heightened uncertainty, which can lead to high volatility, dramatic price swings, and market instability. Keynesian economics refers to these types of factors as "animal spirits" due to their perceived irrationality. In a worst case scenario, a market may experience a setback purely as a result of market jitters, if the sentiment devolves into general pessimism. Markets are presently uncertain. All markets.What does that mean for us?That it is likely a good time to remain on the sidelines as traders, watching and waiting for more clarity.We have endless news that is driving the uncertainty, from Trump and his cohorts contracting Covid to the FCA in the UK banning crypto-derivatives. We have an election, a time when markets are historically uncertain and difficult to predict. Nobody can confidently predict what is coming in the next few weeks and beyond.My goal with this newsletter is to help you become a better trader and investor. The first rule of trading is to preserve your capital. The second rule is to grow it. I take the first rule very seriously, and try very hard to avoid posting trades in an uncertain market.Patience is a virtue. Let's see what happens.IMPORTANT UPDATE, PLEASE READ!To add value for you guys, I have decided to try livestreaming your chart requests! As you know, I accept requests on Wednesdays from 8 AM to 1 PM EST - you can reply to this email with requests. I take one request per person, per week.Each week, I will now go live on youtube (http://youtube.com/scottmelker) and looks at the assets that you request. I believe this will help you see how I approach the charts. This will start tomorrow and I will share the video on Thursday for those who missed it.Be sure to check out my website! There’s tons of educational content and news.https://www.thewolfofallstreets.io/In This Issue:Bitcoin Thoughts And AnalysisIntoTheBlock: Current State of BitcoinAltcoin ChartsLegacy MarketsTrade Management Case Study - ANKRDiginex Is The First Crypto Exchange On NasdaqAll Stocks Could Be TokenizedBitcoin Pledged To Each CongresspersonThe SEC Catches Up To John McAfeeThe Wolf Of All Streets Podcast Ft. Mike McGloneMy Recommended Platforms And Tools