I'm going to teach you a chart pattern, but more importantly show that emotion and psychology are the two most important things in investing success.
Head and Shoulders Pattern
Looking at the the daily chart of Reddcoin (RDD) we see a classic example of what is called a head and shoulders pattern.
This pattern is NOT bullish and puts the odds towards a downward move in price. You can see I noted each shoulder and then head with blue arcs.
Disclosure
Let me be clear. I am long RDD. I have been long since .18 cents. It was testing an uptrend channel when I purchase it and has obviously broken down after bouncing and then failing to go higher.
So why am I still in it?
And here my friends is the lesson...
Learning how to read charts and set targets and exits is actually the easy part. It's just knowledge that can be acquired by studying and practicing.
Executing while you emotions are part of the equation is a different story.
Look at the chart below - do you see how I talked myself into holding onto this?
I drew a line pointing out RDD making higher lows, which can be viewed as positive. Despite recognizing the clear head and shoulders pattern.
You find evidence to support the case you want
For some reason I did not want to sell RDD, maybe it's because it's only at .10 cents per coin now, how much more can I lose?
Maybe it's because I bought at .18 cents and was it even worth bothering to sell and buy lower since it's not a large amount of money?
It could be any of those things.
Bottom Line:
Even Good Traders Do Dumb Things When Emotion and Psychology Come In.
Learn to Invest Like The Cat
Best Regards,
