- 4 months ago
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00:00all right i've turned the music off to have a uh a better discussion um and i i want to
00:10i want to talk about bear markets as a whole um and kind of some key points about bear markets
00:19uh and i'll be summarizing some some key points by uh
00:23a gentleman called joe wiggins uh but it's a very good piece on uh bear markets as a whole
00:32and so i want to discuss that in more detail and kind of prepare you mentally for what we could
00:37see and what we could expect as part of a bear market scenario and bccsa scenario what we are
00:43currently in the price action we're currently in the nature of the market that we're currently in
00:47and kind of you know give you some some overall perspective and thoughts on what that looks like
00:53and hopefully some of these points resonate with you um the first thing to say is that you know
00:59bear markets are pretty much the most challenging environments that anybody will face whether you're
01:04a trader whether or not you're an investor um and you know joe summarizes and says this is really not
01:12because of the losses that will be suffered but it's actually the choices that we make during bear
01:18markets um and that's a really interesting way of looking at it you know the the losing of money
01:25happens in both market scenarios and also you know the bull market scenarios are also you know
01:30challenging um if you're losing money but the bear market side of things is some of the decision
01:38making can be you know awful um and we'll stick with you for a long time both financially and mentally
01:45depending on you know the choices that you make during those periods of time
01:50so what we are what we're really looking for is you know kind of a better understanding of the market
01:59and the nature of the market so first thing is you know bear markets are they're inevitable they are
02:05they always happen they will happen at some point during your market involvement the periods and the
02:12length of times of bear markets are the things that will differ the strength of bear markets
02:17how long one will last you know two months three months three years what it will look like
02:23and as part of that they also tend to look relatively predictable um you know we we kind of look back on
02:32those environments and we say well yeah of course it was obvious it was going to happen and people say
02:37the thing same thing is right now in sort of tech stocks you know you think about the way that
02:41tech stocks have plummeted in value and everybody's now saying yeah well of course that's what was
02:45going to happen right of course it was gonna it was all going to come crashing down and so you kind
02:50of have these you know um red flags and warnings that were in effect and whether or not you chose to
02:59believe them or not uh will be something that you'll take as your first learning point for any future
03:04uh bear market involvement you know those feelings of whether or not it's psychologically it's kind of
03:11you know running running wild in your head you're thinking about how much money you're making in a
03:15bull market and how easy everything is and you can identify those feelings and thoughts next time
03:21they start to occur you know in positive market conditions you start thinking
03:25i just listened to my dog kicking off you start thinking about you know the same way that
03:32you may have thought previously and you can use that now as a warning signal one of those red flags to
03:37say look this is too easy this everything's gone up for far too long we're way too extended now
03:42whatever the situation might be
03:44um we uh also kind of tend to
03:50uh overlook those signals at the time
03:55um in the kind of convincing that uh the good times will continue to roll right so the the positive
04:04times will continue to play out and we won't kind of you know have any decline in the market
04:10and again something to keep in mind that you know we really need to make sure that we
04:15make a note of those thoughts and feelings during times where we have them
04:19uh they will be very very helpful for us in the future and then on the other end of the scale
04:25when we're thinking about kind of tops and the market topping out is you know you absolutely will
04:30not be calling a bottom you will not be calling a bottom you will not do so through
04:35your ta your fundamentals your blind luck just in the same way it's very difficult to call the tops
04:44uh the bottom calling is uh very very challenging um and it's not just the fact that you won't call
04:53the bottom in terms of you know you won't pull out the number that will be the bottom you won't stick
05:00the bottom that's the the biggest thing is you won't stick the bottom so regardless of if you catch
05:06you know an entry that turns out to be the bottom there's no way that you stick that entry yeah that that
05:12is just the reality of the market and the way that things work um the difference that you have in
05:22bear markets is it's attractive to try and call the bottom because of the thought process of what it
05:28would look like if price rallied again you know so you start looking at things and you say well look
05:32if i buy btc at 28 000 and we go to 100 000 that's a huge markup for me on btc so you start kind of
05:40plugging the bottom calling with the psychology of what it would look like should that event occur
05:45and that's kind of an unhealthy habit to find yourself in because all it will do is essentially
05:53pull you into a into a process uh where you will just bleed out your portfolio where you will attempt
05:59to catch multiple bottoms and it just won't work out for you overall it's just a very poor point
06:05overall um news is another important one in bear markets to be covered off you know kind of macro
06:16news uh country specific news the market will you know during bear market conditions obviously we're
06:28usually embroiled in in uh globally relatively nasty environment um so whether or not that's because
06:37economically things are poor whether or not that be because of external factors like war uh are
06:42affecting the markets it um it sets up for a kind of a more negatively charged overall environment which
06:52means that data news events tend to impact the market strongly to the downside versus the upside
07:01that we would expect to see in bull markets and so just being aware that kind of news issues and stories
07:07are kind of always you know they happen with greater strength to the downside and we see recently with
07:13figures that have been published that we tend to see that result in in the markets in terms of the
07:17way the markets have responded to some of those uh some of those stories and data points that have
07:23been released the the next one is kind of the biggest one for me and the most important one which
07:29is about time horizons and i'd love this so much that i tweeted it from the original uh from the original
07:35article and i'll just read the exact quote that that joe gives here which is bear markets induce
07:43panic which means our time horizon shortened dramatically we stop worrying about the value
07:48of our portfolio in 30 years and start thinking about the next 30 minutes being long-term investors
07:54gets even more difficult during a bear market and this is very very true the time horizons contracting
07:59thing is incredibly important especially in crypto because what tends to happen is we are already in a
08:05losing position for the majority of people they're already in a losing position their portfolios
08:09already down significantly from all-time highs they might be trading poorly during this period of time
08:14and everything seems to be very negative and so there's this inherent uh kind of goal to make things up
08:21right to pull things back to start over trading to start trading more there's this real kind of um
08:29internal drive that kicks in that says this is what i need to be doing i need to be doing this i need to be
08:36you know over trading i need to be getting everything back and we start viewing these things like market
08:42pumps like we're seeing today as something that's like i'm missing the bottom right everything becomes
08:47turbocharged in terms of our time expectations the reality is that you will have far longer in bear
08:53market conditions than you would ever wish for right you really don't want to spend long in bear
08:57market conditions but the reality is is that you will right will be in a bear market conditions for a long
09:03period of time and therefore you will have plenty of time to accumulate be a buyer whatever you
09:09whatever you're choosing to do during this time but you certainly don't need to be rushing into
09:14positions you certainly don't need to be thinking about making it all back and you know the example that
09:20joe gives in the next 30 minutes versus 30 years keep those perspectives in mind keep the longer time frames
09:27in mind you know it it really doesn't matter about what's happening here in the short term what's
09:32happening in the short term is you should be protecting yourself as much as possible you truly
09:36need to be protecting your portfolios your capital you need to put as much of that into kind of protection
09:45mode as possible all right we don't want to be losing out just because we're getting greedy in a short
09:52span of time because those horizons have contracted we're trying to make it back and we're making
09:57incorrect decisions and this comes back to what we said at the start right where where the it's not
10:04just the losses during this period of time it's the decision making that we are making in bear markets
10:11that is a major impact and time horizon contraction is one of the most important points
10:18we'll talk a little bit more about losses
10:37so the losses that we're thinking about as of today and portfolio reduction and
10:46you know incorrect decision making
10:49some losses won't be temporary
10:54and we'll think about that for a second so some losses won't be temporary
10:59some losses will what we're saying here is some losses will be permanent
11:04and those losses are usually through poor decision making
11:10so kind of the poor investment decisions that you're making in bear markets
11:14leverage over trading etc they're the permanent losses the temporary losses are the ones where
11:22we're a bag holder of something but we have the option in the future for price to increase and rally
11:27again now that may seem like a distant thought right now that may seem like something that's highly unlikely
11:36but we think about btc from 20k and the sell-off from btc when we hit the original all-time high
11:42if three years later you 3x even if you were a top buyer and that's what we're talking about here
11:50so some losses will remain temporary they won't be realized and we will have the opportunity
11:58hopefully in the future for those to cycle back around to the prices and above the prices that we bought
12:02at in order to you know be able to move out of those positions again and hopefully in profit
12:08but the permanent losses come from the decision making that you'll make during this period of time
12:17so making sure that you're stepping back you are not diving in too deeply into uh you know leverage
12:26trading or getting overexposed in these current market conditions is really really important so make
12:32sure that you're primarily dealing with losses that can be clawed back versus trying desperately to do
12:37things like leverage trade in order to make back perceived loss when it isn't actually permanent
12:43at this point in time it's not actually a permanent loss
12:50next thing is the emotions will be a kind of a dominating factor of any bear markets
12:56the rational thought process that we have is really overcome by the emotional side of things
13:03and you have a range of questions that happen like this you know what happens if it's the bottom what
13:09happens if i'm missing it and it is the bottom uh you can have things you know what happens if it gets
13:15worse and i don't do anything about my positioning in the current moment in time and i think that was one
13:19of the key themes from the stream i did last night was you know people saying well i've i bought this
13:24this price at this price what do i do so the kind of the emotions are really dictating the majority of
13:31decision making that's going on right now you know what happens if it gets worse what happens if it's the
13:36bottom what happens if i should be buying here what happens if i should be selling here and really
13:42we're led by the emotions less so by the chart because the chart is really you know continuation of down it's
13:50it's not great conditions overall and what's happening is our emotions are tending to lead our
13:57thought process around um you know what we should be doing with our capital during periods of time like
14:05this systematically this is where we should be looking right so anybody that is currently thinking
14:15about trading or having a trading system or a thought process this is where that is going to
14:19come kind of to the front is where we're going to be looking at what does the system say what do our
14:24technical signals provide we're going to eliminate the emotion we're going to start moving towards
14:29more of the technical side of things you know does the market say it's a time to buy is it just my
14:34emotion that's telling me that does the market tell me i should sell because there's the ability for
14:39this markets go a lot lower or is it just my emotion telling me that i'm trying to balance it out
14:45but we should very much be focused on the systematic side the technical side the chart side versus
14:50the emotion of the events that are unfolding next up is risk um and again joe summarizes this better
15:03than i will so i'll quote joe it says bear markets are the worst possible time to find out about our
15:09tolerance for risk everyone becomes risk averse when they're losing money the problem for investors is
15:15that living through a 37 loss for example is a far different proposition to seeing it presented in
15:21hypothetical and that's again a really key point is you know a lot of people in crypto of living out
15:30these losses of you know 50 80 90 and that can be very difficult to kind of comprehend wrap your head
15:42head around and to be comfortable with that potential or not
15:49so management of risk is always important even more so in bear however it will push you kind of to
15:57the limit in terms of your risk tolerance so watching your bags depreciate 50 60 70 80 90 in value
16:05will be very difficult it may be unwise you should have maybe had something more
16:11systematically that could have exited your positions earlier there'll be a lot of psychological strain
16:16that will go on during those periods of time where you'll look back and you'll think why didn't i cut
16:20this position you know i knew i should have done this i knew i should have taken some profit off the table
16:25so be very aware of like the impact that the risk will have and also be very aware of the fact that
16:33we don't want to start playing around with our risk tolerance when we're in bear market conditions
16:38and we should tighten up slightly here
16:42um we will extrapolate uh the thought process of the emotions that happen in a bear market
16:50so we tend to get into a cycle of where and crypto is very good at this we tend to
16:56get into a cycle where it is impossible to see any positivity there's no light at the end of the tunnel
17:02everything is negative everything is just going to keep on going down forever prices are just going
17:07to continue getting smashed every rally is going to be sold into there'll never be another bull market
17:12you've missed your chance at making money all these different things will come into play and it's
17:18simply not true in the current environment i always say that crypto offers you so much opportunity
17:23all the time a lot of the stuff in this watch list we won't talk about in six months time
17:27when there's a new bull market when there's a fresh run probably 50 of this stuff we won't even look
17:33at again we'll just be looking at a new collection of projects a new collection of coins a new area of
17:39the market that's boomed like nfts or gaming metaverse all of these new areas of crypto that have
17:47come up in the last 12 18 months that you've had the opportunity to invest in and you will get those
17:53things again there will be those areas again where you have the opportunity to kind of put in fresh
17:58capital deal with a bullish area of the market make some potentially great gains but right now all it
18:05tends to be is this like cloud of negativity over the market everything is bad everything's going down
18:11there's you know talks of regulation there's talks of you know banning crypto there's you know all
18:16these different negative headlines and we see very little positivity in the market as a whole and bear
18:21markets do that that's exactly what their markets do they kind of continue to feed the negativity
18:26they continue to feed that negative environment and so you see no positivity there will be good times
18:33there will be good areas of this market the market as a whole will recover all of those things there
18:38are no doubt in my head that it will happen it's just a case of when and surviving until that moment in
18:44time each bear market will also be very different so when we think about comparisons to previous bear
18:52markets when we think about the way that bear markets looked historically every single bear
18:56market is different because they are very very complex there's a range of reasons why they might
19:02be happening and if we take a look at the current environment you know there's a very clear emphasis on
19:06we don't know why the fuck this is going on right we don't know why this situation is developing but it is
19:13and we know that um we know that uh a lot of like you know hedge fund managers etc don't really have
19:24an idea or a good grasp on the current market and that really tells you something as well you know if
19:29these guys are struggling then why should we think that we should be doing you know performing miracles
19:35and you know doing everything perfectly the bear markets are very different you know i don't think
19:43our bear market obviously will look anything like it did in you know 2018 post and this will have a
19:51completely different look and you know just in the same way that we did at the top and we look back
19:56now and we say well yeah all the warning signs were there it was the top when this finally bottoms out
20:02we'll look back at it and we'll say yep all the signs were there that we were reaching a bottom
20:06and we still wanted lower right that's just the way it's going to work out but don't sit there and
20:12compare this to other bear markets because it will be very different and we've already seen that in the
20:17way it's kind of shaping up now and also don't try and predict the way this bear market will run
20:22because we also have no idea about that and if we start getting down the prediction route we start
20:27getting into things like the psychology and letting the psychology and the behavior of the market
20:31determine what we're thinking about when it comes to kind of our capital and our investment thought
20:36process
20:39this dog man
20:47um and then you know kind of lastly uh bear markets become the ultimate behavioral test
20:55so the outcomes of the bear markets are really more about us than they are about the market themselves
21:02we start thinking about the way that we act during bear markets and the way that we think as longer term
21:09investors or fluctuations daily that we see in the market the way that we check our portfolios more
21:16frequently the fee way that we feel the need to make more trades in a shorter span of time
21:22there are a huge amount of pressures on us individually during conditions that are like this and it is
21:31absolutely imperative that you acknowledge that point you are aware of the fact that the bear market will
21:43be putting all of this pressure on you it will be putting all of this kind of like psychological warfare into
21:50your head you will be dealing with being down on a portfolio you will be dealing with
21:58losing money you'll be dealing with poor trading decisions you have to get all of that in check
22:04it is absolutely so important i cannot stress it enough you will put yourself through an awful
22:13experience if you start to over analyze over assess get into this psychological loop of just getting
22:21crushed in trades trying to make it back losing sense of the kind of the wider time horizons that we've
22:27been talking about if you start following the emotional people blindly on twitter if you start
22:33doing all of these things you're going to have a very poor bear market experience and when the good
22:38times come back around you won't be in a position to take advantage of it if you can sit there now and
22:45preserve your capital learn to trade start thinking about the system start actioning some of the words
22:52and the educational material that you see in the haven for example you have a really good shot of
22:58creating a very good foundation for when the good times come back around if you are sat there now
23:05over trading trying to break the cycle of doing that because addiction plays a part so you're trying to break
23:12the cycle of continually making poor investment choices continually over trading continually looking for
23:19the market to bottom or looking for it to top to leg down again you have to break that cycle
23:28the way that you deal with a bear market from a psychological perspective will help you enormously
23:33in terms of maintaining capital maintaining capital will help you the next time the bull market comes around
23:40so when the bull market returns the decisions that you make at this period in time
23:45will be absolutely key to how successful you will be in the next bull market
23:52so now is the time to get all of that in check
23:55right your thought process your mentality etc and don't fall into some of the traps that i've discussed
24:02i know a lot of you will you know listen to this and you'll think yeah
24:05shit that's me that's what i've been doing that's how i feel
24:09and that's what everybody feels you're not alone in that thought process
24:12so it's just very important now that you individually get a grip on this and make sure
24:19that you make the right decisions at this moment in time to avoid having weeks and months of just
24:25bleeding out until eventually you capitulate near a bottom
24:32i hope this has been helpful any questions on this please just let me know and i'll do my best to answer