Hi Steemians !
In this short post, i will try to talk about what we call the media trap, we know that the media have hug power. Less qualified investors who follow these media to make investment decisions based on the news from these different media sources, make a fundamental mistake ! this mistake in most of the times erases their wallet too quickly.
So these media can very easily influence the emotions of these investors by two psychological phenomenon.
The "FOMO" and the "FUD".
These two psychological phenomenon, are well known in the the stock market and investment in general.
The "FOMO" or "Fear Of Missing Out" or the fear of missing an investment opportunity.
The "FUD" or "Fear, uncertainty and doubt" it is a rhetorical technique used in particular in sales, marketing, public relations and political speech.
It is about trying to influence people by spreading negative, often vague and fear-inspiring information.
By these two phenomena the media can totally is easily change the direction of the market !!
Source : wikipedia.org
How it works ?
FOMO
We will take for example the BITCOIN or cryptos market in general, in my opinion this market is very manipulated, because it is a market where we find much more particular than investment institutions with plans and rules of very precise investment.
In end of 2017, as we all know ! The end of 2017, more precisely since October 2017, we had a very strong increase in BITCOIN and many other Cryptos of course. During this period the differents media, have all published articles and reports like the BTC has made 20 times that value in one year, and it is the investment of all time ... These are strong titles that influence, It is very easy for new investors who do not have an idea about the technology. In which they invest their money, and that the only interest and motivation is profit ! So these media creates what is called the FOMO, this fear of missing a good investment opportunity !! That makes people buy up. :)
As we knew, no hug increase without correction !
Source : pexels
After the end of 2017 rally, the correction came early 2018 !! And that's normal ☺, once again investors who put their money in the top by following the media, will find themselves facing these same media with extremely negatives information an bad reports !!!
Example of the titles used during the crash :
- Bitcoin is dead!
- Bitcoin lost 60% of that value in a week !!
- The end of the golden age of cryptocurrency !!!
By this action, the media call on the second phenomenon !!
FUD
Yes no matter the media, even the specialist of finance ... like "The Wall Street Journal" or the "Financial Times", these media generates sales with these articles and reports.
So by these titles it generates a lot of views and clicks, so a lot of money sure !! Their interest is not to teach you when and how to invest, but rather to sell more and earn more !!
So the investors who bought very high are the first seller in loss during the crash !! Because they are people who are very easily influenced by the media, and also because they know nothing about what they invest, and that the quick profit was their only interest and motivation to make this investment.
Source : unsplash
We have seen that the media can very easily influence the direction of the market and create a strong increase by the FOMO, then there was a sharp decline caused by what is called the FUD.
There is one strategy that makes it easy, and that shows that it is the best for a long time, is :
- Buy down
- Sell high
So this strategy is totally distorted by the media, FOMO and FUD, because with FOMO and FUD created with the media, you will :
- Buy at the top
- Sell at the bottom
So following the media to make decisions is completely losing strategy !!
In conclusion, the lesson to remember is to do research well before making an investment in a cryptocurrency, find the strategy that you according to your financial, invest in a project of value and has a "use case" on the long term.
Remember, the best investment is the long term !!
Think big, feel different !
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice.
Please conduct your own thorough research before investing in any cryptocurrency.