Vanity is excessive pride in or admiration of one’s own abilities, appearance, or achievements. There is a fine line between vanity and ego. Ego is a person’s sense of self-esteem or self-importance.Vanity may be the devil’s favorite sin, but ego can be a trader's (or investor’s) worst nightmare.Ego gets in the way of rational, logical, and reasonable conclusions because fear and greed can tug on our egos and cause us to make mistakes.

Vanity & Ego

Human nature is a powerful force, but it deludes us to believe our gut instincts. When the price of an asset falls to a level where an investor or trader believes is a logical, reasonable, and rational low, they perceive the price as a bargain.After an initial purchase, if the price continues to fall, our emotions cause a dangerous impulse. The little voice in our heads (ego) declares that the market is wrong. But it's never wrong.The quest to buy the low in any market has everything to do with ego and little to do with making a profit.

Buying The Low

On April 20, 2020, in the crude oil futures, came to 0$. Who wouldn’t want to buy crude oil at zero? After all, what is the risk?As the history shows, a purchase of the expiring futures contract at zero looked more than ugly at negative $40 per barrel, the April 20, 2020 low.

Example Of Buying The Low

Shorting an asset has the same ego dynamics. The market can take prices to levels on the up and downside that defy logic, reason, and rational analysis. There are many instances where prices rise to levels that make no sense.Selling short and ignoring the power of the trend is dangerous and could be disastrous. Just because a market price rises to a high, does not mean it cannot go higher, a lot higher.

Selling At All Time High

The annual chart of wood price has never traded over $493.50 per 1,000 board (1993 ATH) before 2017.After falling to a low of $251.50 in early 2020 as the global pandemic gripped markets across all asset classes, the price took off on the upside.At $660 in August 2020, it reached a new record high.At $1,000 in September 2020, the price was irrational, and it more than halved in value, reaching a low of just over $490 in October 2020.In May 2021, the price exploded to $1711.20 per 1,000 board before collapsing.

Example Of Selling At ATH

Following trends requires a special skill, which is no skill at all. Ignore expert advice, the news, and any other exogenous forces. The only tool necessary is a simple chart that displays the path of least resistance of the price.The process is entirely objective, while fundamental analysis is completely subjective.James Surowiecki argues that the many are smarter than the few and collective wisdom shapes business, economies, societies, and nations. A price chart is the roadmap of the crowd’s wisdom.

Follow The Trend

Eliminating ego from all investment and trading decisions starts with ignoring the news, experts, and any inputs other than the herd behavior in markets.Prices rise &amp; fall to levels that many believe are not sustainable, following trends allows you to take advantage of their mistakes. Make a conscious decision that you will end the quest to pick a high or low in any market.Ignore those voices in your head that appeal to your ego. Never forget that your view has no relevance whatsoever. Approach markets with a clear risk-reward plan.

Suppressing Emotions are Harder Than You Think

Vanity may be the devil’s favorite sin, but ego can be a trader or investor’s worst nightmare. 

Cryptocurrency Trading

Leave Your Ego At The Door

Any coin other than Bitcoin is considered an altcoin.<ul><li>There's a huge variety in the altcoins available, from large-cap coins like Ether and BNB to tokens from newly launched projects. </li><li>Altcoins have traditionally been associated with&nbsp;ERC-20 tokens&nbsp;on Ethereum and the native tokens of other large&nbsp;blockchains.</li></ul>

What is an altcoin?

While&nbsp;Bitcoin (BTC)&nbsp;is the largest&nbsp;market cap&nbsp;coin and the most well-known cryptocurrency, you should&nbsp;diversify&nbsp;your investment portfolio as a responsible investor.To do this in the crypto world, you're going to need to purchase altcoins. <ul><li>You can reduce your overall risk by exposing your cryptocurrency portfolio to different coins and sectors in crypto, like&nbsp;Decentralized Finance (DeFi)&nbsp;or GameFi. This way, if Bitcoin crashes in price, your other crypto investments may balance out some of the losses.</li></ul>

Why should I invest in altcoins?

<ul><li dir = "auto">Ethereum (ETH)</li><li dir = "auto">Solana (SOL)</li><li dir = "auto">Polkadot (DOT)</li><li dir = "auto">Binance Coin (BNB)</li><li dir = "auto">Meme coin: Dogecoin (DOGE)</li><li dir = "auto">Stablecoins: BUSD / USDC</li><li dir = "auto">DAI</li><li dir = "auto">Uniswap (UNI)</li><li dir = "auto">PancakeSwap (CAKE)</li></ul>Don’t Risk More Than You Can Afford to Lose!

Altcoins To Diversify Your Portfolio

Want to start investing in altcoins but not sure how? Here are 9 altcoins across DeFi, stablecoins, and more in the crypto space to create a diversified portfolio.

Crypto

When it comes to wealth creation in equity market, investing and trading are the two genres of the field. However, investing and trading are very different approaches of wealth creation or generating profits in the financial market. Imagine, today, you and your friend bought equal amount of seeds to sow in your fields but you sold them to someone in a day because you could earn profit. And your friend sowed the seeds and let them grow for a few years till they gave new seeds. He sowed the new seeds and continued this for years and sold a lot more seeds eventually than were bought.

Investing and Trading

By investing his seeds he would have made profit quite different than what you made by trading your seeds. This is simply the difference in investing and trading.To learn the same in financial markets, let’s learn 5 key differences between investing and trading.

Trading is a method of holding stocks for a short period of time. It could be for a week or more often a day! Trader holds stocks till the short term high performance, whereas, investing is an approach that works on buy and hold principle. Investors invest their money for some years, decades or for even longer period. Short term market fluctuations are insignificant in the long running investing approach.

Period

Traders look at the price movement of stocks in the market. If the price goes higher, traders may sell the stocks. Simply, trading is skill of timing the market where as investing is an art of creating wealth by compounding interest and dividend over the years by holding quality stocks in the market.

Capital Growth

Undoubtedly, both trading and investing imply risk on your capital. However, trading comparatively involves higher risk and higher potential returns as the price might go high or low in a short while. Since investing is an art, it takes a while to develop. It involves comparatively lower risk and lower returns in a short run but might deliver higher returns by compounding interests and dividends if held for a longer period of time. Daily market cycles do not affect much on quality stock investments for a longer time.

Risk

Let’s learn it this way, trading is a one day cricket match while investing is a test cricket. You would watch skillful players in the team who are expected to strike fours and sixes to score higher in a one day match. Whereas, the art of the game is seen in the test match! Similarly, traders are skilled, technical individuals who time the market and learn market trends to hit higher profits in the stipulated time. It is related to the psychology of the market. Investors on the other hand, analyze the stocks they want to invest in.

Art Vs. Skill

Traders put money in a stock for a short term. They buy and sell fast to hit the higher profits in the market. Missing the right time may lead to loss. They look at the present performance of the companies to hit the higher price and book profits in short term. Investors keep themselves away from the trends and invest in value. They invest for a longer period of time keeping an eye of the stocks they hold. They patiently wait till the stock reaches its potential. Ultimately, the ones who achieve their financial goals are successful!

The ones who do

Going back to our story, you are the one to decide if trading the seeds at a higher price making a smaller profit in a short time is your goal or holding on and growing more seeds to sell at much higher price in the long run is what you aim for.

Investing and trading are very different approaches of wealth creation or generating profits in the financial market. Learn how investing & trading is influenced by time period, capital growth and risk.

Career and life

5 Differences between Investing and Trading

Trading with discipline will put more money in your pocket and take less money out. The one constant truth concerning the markets is that discipline = increased profits

The Market Will Pay You For Your Discipline 

Trading Discipline

Shadow on Mar 19

Traders Fail because they use hope in the Market instead of strategy and a TradingPlan.They enter a position and it's already 50% against them now<ul><li>They hope it doesn't go haywire more.</li><li>They hope it miraculously turns around.</li><li>And the whole lists of hopes.</li></ul>Don't use Hope have a trading plan and a strategy set because hope is never a good strategy in the market.