Succumbing to the FOMO (fear of missing out) syndrome and trying to catch the uptrend is what causes investors to hurry and breed unprofitable deals.
Learning something new takes time, and it gets in the way when it is not there. Investors collect dubious information and believe in it, hoping for their luck. Soon, the whole process leads to false confidence, and then to investment mistakes.
In addition to the above, experts feed investor confidence in their knowledge with the help of predictions that coincide with their expectations. To believe such predictions is to fall into the trap of their prediction. Investors are starting to trust forecasts after searching for profitable arguments in their favor, and not counter-arguments, which is correct with a qualitative analysis.
Things can change for the better if the investor makes a mistake and realizes the level of unpredictability in making someone else's predictions on faith. If the predictions come true, it means that the process is irreversible until the investor’s trading account is reset. This is due to the lack of full control over the decisions made. It is impossible to fully control the situation if you rely on someone else's opinion. Therefore, only one investor takes on all the risks in this situation.
You may ask: what about the good investment forecasts that make a profit? And there is a question in response: what makes an investment forecast good? The good come true and the bad do not. And here is another question: why don’t investment forecasts come true? This sheds light on the nature of the forecast, which is not so much about the future, as about the present and attempts to extrapolate the emerging trends for the future in order to gain clarity in the future.
Everyone is looking for stability at least for a short time to protect against uncertainty and chaos. And when such a trend is planned, market participants immediately begin to consider it as something well established. This can be traced to the forecasts of both experienced experts and bold investors.
At the moment, when the trend to growth is clearly expressed, experts and investors predict a growth in market capitalization, the cost of tokens and the price of Bitcoin. Compare Bitcoin price forecasts for 2018, which were made in December 2017. You will see that in December, the rate was expected to rise to $50,000 and higher.
At a time when everything is so bad in the market, experts and investors are pessimistic about their forecasts. In February 2018, cryptocurrency capitalization began to plummet, and market participants started talking about the inevitable correction due to the upcoming Chinese New Year, then pessimism began to gain momentum and a real panic started to engulf every crypto forecast.
At a moment, when a certain tendency persists for a long time, the forecasts of experts and investors become extremely self-confident. The bull market began in November 2017, and if at first, the forecasts were rather cautious, after the explosive growth in December of the same year, market participants discarded all fears and predicted unlimited growth in the value of any crypto assets.
The following conclusion suggests itself, whether it is necessary to completely change the attitude to investment forecasts, since there is no difference between them, just as there is no difference between the rates in the casino. Betting is a game with risk and unpredictability, investment forecasts are the same game. This is the way of the world, as people impose their knowledge as a map on objective reality, considering that it fully reflects it, and reality, by definition, is broader.
The market makes all equal before ignorance of the future. Neither large investors, nor funds, nor anyone else know what exactly is about to happen. All are engaged only in the development of hypotheses and the prediction of probable events, forgetting about the real probability of their occurrence. This fact even applies to the stock market, which has existed for much longer than the cryptocurrency market. Therefore, it is possible to build investment forecasts on the cryptocurrency market only over a long-term in order to avoid hasty emotional actions with short-term trends. The market is rather chaotic even for well known and experienced funds. Take a look at the performance of the Pantera Capital investment fund. From the beginning, the value of their assets fell by 72.7 percent. It seems that this is the real state of the market, rather than individual investment portfolios.
Analyzing all of the above, we can draw several conclusions:
Looking for good predictions is like waiting for “that one card” in poker;
Fully trusting someone else's investment forecasts is too risky and presumptuous;
Hurrying after an overbought trend is fraught with serious consequences for the investor.
Without a doubt, there are plenty of opportunities in decision making, and there are alternative methods even when there is no time to dive into a new area. Here are some of the tricks:
Relying on your knowledge gives you more room to maneuver with the right attitude to risk;
Monitor experienced traders or investors, but do not copy their investment transactions;
Listen to investment forecasts and look in which direction the "money is moving";
Stop looking for forecasts of the development of the situation and find the fundamental reasons for its beginning;
Screen out surface analytical reviews on the cryptocurrency market.
Now on the cryptocurrency market, there is a great opportunity for those who did not have time to go into it earlier. There is still time to become a new crypto millionaire.