The Wolf Den #178 - Psychology And Health In A Bull Market
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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!Instead of writing my own intro, I want to share a tweet thread written yesterday by Ari Paul at the beginning of the small Bitcoin correction. This is really important."We're probably entering (I think) a brief and minor correction now, but we're still in the midst of a violent bull run that will soon be more violent. Here's a thread on psychology and health.Bear markets are brutal, but bull markets can be just as tough in other ways. Seeing random people suddenly 30x their money in scam coins (or maybe quality that you missed) is rough. Trying to keep up with the constant flood of news and opportunity is exhausting.Euphoria over life changing gains. Then a gambler's craving for just one more hit of that same euphoria. Here's my advice, including some hard learned lessons from the last bull/bear cycle.Go all-in mentally. This *is* an incredible opportunity. But... pace yourself. This is a marathon, not a sprint. Maintain your health, good sleep and dietary habits when possible, and your sanity.Stay grounded. Hang out with non-crypto people, friends, family etc. Go for a hike, go camping, get away from screens on occasion. Read a book. Meditate. Do things that bring your cortisol and adrenaline levels down.Perhaps most importantly, don't blow up. It's amazing how many people end bull runs with less money than they started. The easiest ways to blow up: FOMO'ing in to positions after they've outperformed with big chunks of your portfolio, leverage, and shorting.The biggest/hardest question: when to sell? No easy answer to this unfortunately. A reasonable approach is to very gradually scale out of positions on the way up. For example, you could sell 20% every 2x. Not optimal, but will likely result in a fine outcome with less stress.One tough thing about parabolic markets: no matter you do, you're almost certain to end up with 30%-50% less money than you had (or would have had if you weren't scaling out) at the absolute peak. And that's a pretty darn good outcome. Your paper gains are "real," but, best to think of it as "found money" until you realize the gains. If you put $100k in, turn it into $3m, it can still be psychologically painful and lead to poor decisions to end up exiting with $1.5m. Remember that's a great outcome!Lastly - while I'm obviously a highly convicted bull, these are truly risky and speculative assets. Even if they do change the world as we hope, that doesn't mean the price of an asset can't fall 80% and stay there for years as even the highest quality cryptocurrencies do.I'm gonna tack on a re-iteration of the things that make people blow up. A. FOMO - chasing a parabolic move. Basically - don't do it, and if you're gonna do it, do it small and/or with a stop limit. B. Leverage - this is a hyper volatile market, you don't need it. C. Shortselling - imo - rarely worth doing in a bull market at all. Markets can and will gap higher. You can't trust stop limits since exchanges might go down when you need them. Why take the difficult route when you could go with the tailwind?"Take all of this advice to heart! It is essential in these crazy times to take care of yourself - particularly your physical and mental health. Be prepared for the inevitabilities noted above and you will come out the other side both happy and profitable.As I expect the market to give a bit more clarity in the coming hours, I will be live streaming at 2 PM EST to take a look at the charts. Join me here: https://www.youtube.com/watch?v=PFaR3DNp6dMIn This Issue:Bitcoin Thoughts And AnalysisAltcoin ChartsPoker, Trading & LifeFree Crypto!Another Analyst Predicts Bitcoin Over $200KIf Your Stimulus Check Went To Bitcoin...Mark Cuban Thinks Ethereum Could Be Better Store Of ValueMy Recommended Platforms And Tools
The Wolf Den #178 - Psychology And Health In A Bull Market
The Wolf Den #178 - Psychology And Health In…
The Wolf Den #178 - Psychology And Health In A Bull Market
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!Instead of writing my own intro, I want to share a tweet thread written yesterday by Ari Paul at the beginning of the small Bitcoin correction. This is really important."We're probably entering (I think) a brief and minor correction now, but we're still in the midst of a violent bull run that will soon be more violent. Here's a thread on psychology and health.Bear markets are brutal, but bull markets can be just as tough in other ways. Seeing random people suddenly 30x their money in scam coins (or maybe quality that you missed) is rough. Trying to keep up with the constant flood of news and opportunity is exhausting.Euphoria over life changing gains. Then a gambler's craving for just one more hit of that same euphoria. Here's my advice, including some hard learned lessons from the last bull/bear cycle.Go all-in mentally. This *is* an incredible opportunity. But... pace yourself. This is a marathon, not a sprint. Maintain your health, good sleep and dietary habits when possible, and your sanity.Stay grounded. Hang out with non-crypto people, friends, family etc. Go for a hike, go camping, get away from screens on occasion. Read a book. Meditate. Do things that bring your cortisol and adrenaline levels down.Perhaps most importantly, don't blow up. It's amazing how many people end bull runs with less money than they started. The easiest ways to blow up: FOMO'ing in to positions after they've outperformed with big chunks of your portfolio, leverage, and shorting.The biggest/hardest question: when to sell? No easy answer to this unfortunately. A reasonable approach is to very gradually scale out of positions on the way up. For example, you could sell 20% every 2x. Not optimal, but will likely result in a fine outcome with less stress.One tough thing about parabolic markets: no matter you do, you're almost certain to end up with 30%-50% less money than you had (or would have had if you weren't scaling out) at the absolute peak. And that's a pretty darn good outcome. Your paper gains are "real," but, best to think of it as "found money" until you realize the gains. If you put $100k in, turn it into $3m, it can still be psychologically painful and lead to poor decisions to end up exiting with $1.5m. Remember that's a great outcome!Lastly - while I'm obviously a highly convicted bull, these are truly risky and speculative assets. Even if they do change the world as we hope, that doesn't mean the price of an asset can't fall 80% and stay there for years as even the highest quality cryptocurrencies do.I'm gonna tack on a re-iteration of the things that make people blow up. A. FOMO - chasing a parabolic move. Basically - don't do it, and if you're gonna do it, do it small and/or with a stop limit. B. Leverage - this is a hyper volatile market, you don't need it. C. Shortselling - imo - rarely worth doing in a bull market at all. Markets can and will gap higher. You can't trust stop limits since exchanges might go down when you need them. Why take the difficult route when you could go with the tailwind?"Take all of this advice to heart! It is essential in these crazy times to take care of yourself - particularly your physical and mental health. Be prepared for the inevitabilities noted above and you will come out the other side both happy and profitable.As I expect the market to give a bit more clarity in the coming hours, I will be live streaming at 2 PM EST to take a look at the charts. Join me here: https://www.youtube.com/watch?v=PFaR3DNp6dMIn This Issue:Bitcoin Thoughts And AnalysisAltcoin ChartsPoker, Trading & LifeFree Crypto!Another Analyst Predicts Bitcoin Over $200KIf Your Stimulus Check Went To Bitcoin...Mark Cuban Thinks Ethereum Could Be Better Store Of ValueMy Recommended Platforms And Tools