The time has come to revisit a topic that gets passed up far too often when trading. If you are watching the markets (any market) correctly you will see this play out time and time again. You will see the human factor of emotions play out in every cycle and when you learn to see it you will ensure yourself profitability.
Now I'm a dummy when it comes to trading but I've spent a considerable amount of time seeking out those that are not so dumb and those that aren't looking to manipulate my emotions for their gain. I've come across some groups and individuals that of course charge to get the insider scoop to their methodology but they put plenty of little golden nuggets out in public that if you're watching carefully, you can catch and follow. One day I plan to join a particular group but until I have joined and can make a judgement of the full picture I will leave them unnamed.
Enough about me though. What this post is here to show is how info gleaned from these sources have proven useful in my small trading adventures.
The last few weeks showed a perfect example of the 'Emotions of a Market Cycle" with regards to the BTC/USD price. It's hard to see if you don't set your time interval correctly but, it is there in plain sight if you set the interval to 2hr. Back at the beginning of OCT we started to see some upward trending from our $230 range that we'd been holding at for a good part of the year. That triggered something in me that said it's time to buy and look long. With the 'Wall Street Cheat Sheet" in hand I waited and progressively pushed my sell price higher looking for the spike. It took a month to come but it came and went quickly over the course of the last 2 weeks with the important part playing out over the 1st half of this week. Looking at the chart vs the cheat sheet there was no mistake that emotions were at play now and I saw my indication Wed morning before heading to work that it was time to pull out. At a sell price of $473.24 I had made plenty of gains and had done the hard job of rejecting greed. Looking again at the end of the day and even more now a few days out, I've got my confirmation that this bond of emotion and market level holds true.
In the image you will see the correlation between emotions and real time market levels. Monday = Belief / Tuesday = Thrill / Wed = Euphoria / Thursday = Complacency and now we are into or close to anxiety. If the cheat sheet holds true we can see what is coming and plan for it accordingly.
I plan to keep this cheat sheet in the back of my mind whenever following markets that I'm invested in to help keep my in the positive and most importantly remind me of the perils of greed. I hope this info is of some use to you when we see the next wave.