The Wolf Den #636 - Dealing With Fomo
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In This Issue:
Dealing With Fomo
Bitcoin Thoughts And Analysis
Legacy Markets
The Austrian School Of Economics 101
Is Binance Being Charged?
SBF Has Been Arrested
Whales Vs. Retail
My Recommended Platforms And Tools
Dealing With Fomo
I hate the term FOMO. It’s so overused that many of you think succumbing to it is simply a part of what it means to be in crypto. Plus, because it’s so commonly discussed, it can almost seem semi-cool to fall victim to it, like loss porn on Reddit.
But what I really hate the most is that chalking up a bad decision to FOMO stops you from actively improving your decision-making process, with costly consequences.
Making good decisions is the name of the game in crypto and the opposite of FOMO. To make sound decisions you must understand that you can’t capitalize on all of the opportunities. You won’t always know the right time to buy or sell. Even the best investors or traders in the world don’t expect that to happen. Hindsight is easy, but foresight is incredibly hard.
What many of you don’t realize, however, is how often emotions are actually driving your decisions. Getting clearer on what FOMO is really about is a simple way of identifying the hidden emotions affecting you. In this way, FOMO provides an interesting opportunity.
When we start to analyze what FOMO is really about, yes, some of you are genuinely worried that you will miss out on the next hot altcoin or a big move in the market. But the real issue is what missing out means to you.
Think about it for yourself. Missing out could feel like losing and you hate losing. Or maybe missing out would be proof that you're not perfect when you struggle with perfectionism. Perhaps you’re not happy in your life/job and you saw that one big trade as your ticket to freedom. Or maybe the only reason you are in this game is to make a shit ton of money and FOMO is really just greed compelling you to gamble.
Hidden emotions or impulses like this cause you to alter your thoughts, shortcut your process, or take on too much risk. To counter them, you need to pay attention, ask questions, and do some tracking. I have a free tool that can help, that I call a Data Collection Worksheet.
If you’re not sure why FOMO is affecting you, start by collecting data around each decision you make so you can look for patterns and identify what is driving your decisions (if you know when FOMO shows up, you can collect the data just on those decision points). Here’s an example of what I mean:
FOMO is definitely a big reason why traders and investors make poor decisions. Using this tool consistently will help you uncover the faulty patterns in your decision making and allow you to be more aware when you’re about to make a poor decision so you can change course.
By the way, sometimes FOMO isn’t an emotional problem, it's a technical one. For example, if you feel like you’re always chasing the market it could be because you’re lacking the requisite skill as an investor/trader to recognize quality opportunities. There’s always going to be someone making money, or minimizing losses, and if you're serious about being in that camp, rather than someone who simply rides the wave of the market, you need to take seriously the need to develop your strategy and skill set.
Today's intro written was composed by Jared Tendler.
Jared Tendler, M.S. is a mental game coach for world champion poker players, PGA Tour players, sports bettors and financial traders from 45 countries. He is the author of three highly acclaimed books, including his latest The Mental Game of Trading. Find out more about Jared’s work at: https://jaredtendler.com/
Bitcoin Thoughts And Analysis
DAILY CHART
Bitcoin is moving nicely today, but still nothing meaningful to report. Perhaps price is ready to take a shot at $17,592, the line that we are all watching.
The 50 MA looms above that line as resistance as well, so it will take a serious push by bulls to keep price rising.
Legacy Markets
"US index futures and European equities rose amid forecasts inflation in the world’s largest economy will post the lowest figure this year, warranting a less hawkish Federal Reserve.
US stocks advanced Monday as traders took comfort from economists’ projection for a 7.3% expansion in the US consumer price index for November. If that expectation comes true, it would be the lowest reading in 11 months and the fifth consecutive drop. While that would still leave inflation much higher than the Fed’s target of 2%, it could justify a slowdown in the pace of monetary tightening, with a projected half-point move on Wednesday. However, it also leaves the bar low for disappointment and a selloff.
“Today’s US CPI data will give us an idea on how the market pricing for the Fed’s terminal rate will clash with the dot plot projections that will come out tomorrow, and that will, in all cases, hammer any potentially optimistic market sentiment,” Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, wrote in a note. “Therefore, even if we see a great CPI print and a nice market rally today, it may not extend past the Fed decision on Wednesday.”
Key events this week:
US CPI, Tuesday
FOMC rate decision and Fed Chair news conference, Wednesday
China medium-term lending, property investment, retail sales, industrial production, surveyed jobless, Thursday
ECB rate decision and ECB President Lagarde briefing, Thursday
Rate decisions for UK BOE, Mexico, Norway, Philippines, Switzerland, Taiwan, Thursday
US cross-border investment, business inventories, empire manufacturing, retail sales, initial jobless claims, industrial production, Thursday
Eurozone S&P Global PMI, CPI, Friday
Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.1% as of 9:45 a.m. London time
Futures on the S&P 500 rose 0.1%
Futures on the Nasdaq 100 rose 0.2%
Futures on the Dow Jones Industrial Average rose 0.1%
The MSCI Asia Pacific Index rose 0.2%
The MSCI Emerging Markets Index was little changed
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0540
The Japanese yen was little changed at 137.68 per dollar
The offshore yuan was little changed at 6.9896 per dollar
The British pound was little changed at $1.2277
Cryptocurrencies
Bitcoin rose 0.1% to $17,199.73
Ether fell 0.6% to $1,267.04
Bonds
The yield on 10-year Treasuries declined one basis point to 3.60%
Germany’s 10-year yield was little changed at 1.94%
Britain’s 10-year yield advanced five basis points to 3.25%
Commodities
Brent crude rose 1.1% to $78.88 a barrel
Spot gold rose 0.1% to $1,783.36 an ounce"
The Austrian School Of Economics 101
I wrote a short blog on the history of the Austrian School of Economics and its core tenets.
Did you know that Bitcoin and the Austrian school of thought have been closely tied since Bitcoin's inception? Many Austrian economists have turned to Bitcoin because it aligns so well with their thinking. Read the blog, you'll start to see why.
Is Binance Being Charged?
Yesterday, misleading headlines about Binance circulated online, referencing old news as if it was hot off the presses. Are we surprised? If you didn't know, Binance has been under investigation since 2018 for violating U.S. anti-money laundering laws and sanctions. The prosecutors investigating the matter are split. If you read the headlines yesterday, you would have believed a whole different story.
Coindesk chose this as their headline: “US Prosecutors Look to Charge Binance, Executives on Possible Money Laundering Violations: Reuters.” This gives the impression that there is no split in the decision-making and that the charges are new. Further, the typical result of these cases is a fine, stricter oversight, and business as usual. But hey, FUD sells.
Also, is it a coincidence that Coindesk, owned by DCG, is digging up old FUD directed at Binance? I know Reuters started the story, but Coindesk saw an opportunity to dunk and they ran with it.
There's seemingly nothing new here.
SBF Has Been Arrested
SBF was scheduled to appear as a witness in Congress today. Then he was arrested.
Hours before Sam was taken into custody, the news that Sam and other executives at FTX and Alameda were part of a group chat called, "Wirefraud" was leaked. We have no idea if this rumor is true. At this point, who cares?
What we do know is that Sam's arrest by the Bahamian authorities was requested by the U.S. and that a sealed indictment is about to be released. He will likely be extradited.
According to the NYT, "the criminal charges against Mr. Bankman-Fried included wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy and money laundering, said a person with knowledge of the matter."
This is a win for the crypto community and a first step in the effort to repair the industry's image.
One down, a lot more to go.
Whales Vs. Retail
The number of bitcoins held by retail investors has doubled since 2018, when they held 1.5 million.
According to data from Glassnode and analyzed by CryptoSlate, retail investors (someone who holds one Bitcoin or less) are on the rise while whale investors (someone who holds more than 1000 Bitcoins) are on the decline. Roughly 80% of the price drop-off can be accounted for by the activity of whales alone.
So if you want a group to blame, blame the whales. This insight also proves that retail buys regardless of sentiment and news. Nothing is sexy about buying right now, but any great investor will tell you that the dollar-cost average strategy is far superior. Retail never had a problem with buying, we simply just don't know how to take a profit.
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.
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