How we usually think about the Dunning-Kruger effect is that, when initially encountering a new subject that they’re interested in, people tend to overestimate their competence the less they know.

It happens to everyone who begins their trading life in a bull market. Their early investing is so successful that they think they’re a genius. Obviously, the sick gains prove their strategy is correct!

This actually happened to me in 2015, but not in crypto space. That year was my introduction to the Philippine stock market. After three months of trading, I got confident because gaining was so easy. I have no knowledge of bull and bear markets at that time, and I took technical analysis for granted. I thought, I was a genius because my strategy was working. I didn’t know that I entered the market during the last phase of a bull trend. After a year, I lost 49% of my capital. Though for many, $4,000.00 is not real money, for me, that was a big deal. Traders call it "tuition fee" you have to pay as part of your learning.

Entering the crypto space just July last year, I have a different experience. This time, since I know almost nothing about this new field, I just made a "test buy" of $300.00 and I no longer bother myself much about market trends. Though I still consider it important in case I will trade a coin, but my focus now is more on gradually growing my holdings. Interestingly, after 6 months and now that we are even seeing the prices of coins falling, but as I look into my position, still, the net yield is positive. Just thinking, how much more if the bulls start to rush again?