Human psychology is remarkably predictable and for whatever reason, history has shown our complete inability to learn from the past. Renowned investor and hedge-fund manager, Ray Dalio, has expounded on these ideas in his analyses of how the general economic machine works and the rise and fall of world powers.
Many will claim that Technical Analysis is a sham because ‘arbitrarily drawn lines’ cannot possibly predict price action. Nobody has ever claimed that TA can be used with 100% success, but I believe there is no doubt that when understood correctly, it can provide somebody with a competitive edge in the market. This is because those ‘arbitrary lines’ are a reflection of trader psychology which is much more predictable.
The recent memecoin wave saw traders rushing to try and capitalise on the hype, but as is often the case, the vast majority of them will lose out and the coin puts out a chart that follows the pattern of the Wall Street Cheat Sheet.
Bitcoin. Solana. NFTs. Memecoins. It does not matter what the asset is. All have experienced extensive hype runs which have been followed by a near complete reset or retracement. Chasing hype is NEVER statistically in your favour. You are far more likely to be buying near the top and end up bag holding while the asset undergoes a significant, if not entire, correction. Giving into FOMO is a major roadblock many investors face which I highlighted inthis article.
My hope is that in helping people understand these patterns, we can be better equipped to look at these hype runs objectively, learn not to chase these positions, only engage with a clear strategy, and have the patience to wait for better entries that align with the patterns of the market.
Human psychology is remarkably predictable and for whatever reason, history has shown our complete inability to learn from the past. Renowned investor and hedge-fund manager, Ray Dalio, has expounded on these ideas in his analyses of how the general economic machine works and the rise and fall of world powers.
Many will claim that Technical Analysis is a sham because ‘arbitrarily drawn lines’ cannot possibly predict price action. Nobody has ever claimed that TA can be used with 100% success, but I believe there is no doubt that when understood correctly, it can provide somebody with a competitive edge in the market. This is because those ‘arbitrary lines’ are a reflection of trader psychology which is much more predictable.
The recent memecoin wave saw traders rushing to try and capitalise on the hype, but as is often the case, the vast majority of them will lose out and the coin puts out a chart that follows the pattern of the Wall Street Cheat Sheet.
Bitcoin. Solana. NFTs. Memecoins. It does not matter what the asset is. All have experienced extensive hype runs which have been followed by a near complete reset or retracement. Chasing hype is NEVER statistically in your favour. You are far more likely to be buying near the top and end up bag holding while the asset undergoes a significant, if not entire, correction. Giving into FOMO is a major roadblock many investors face which I highlighted in this article.
My hope is that in helping people understand these patterns, we can be better equipped to look at these hype runs objectively, learn not to chase these positions, only engage with a clear strategy, and have the patience to wait for better entries that align with the patterns of the market.