Bitcoin and MSTR price correlation

[deaddog]

Yeah, this is ugly... switched from trader to investor oh well!

So what motivates a trader to do that?

And at what point does it become a bad investment? Is it a dollar figure or a certain length of time that has to go by?

As a trader you make your money by buying and selling. As an investor hopefully your asset gives you a little cash flow. When you turn a trade into an investment you have to count on that investment paying off better than the trades you could be making with the capital you have tied up. Surely there is something out there that you could be trading that will perform better than a losing investment.

 

[VicBee]

So what motivates a trader to do that?

And at what point does it become a bad investment? Is it a dollar figure or a certain length of time that has to go by?

As a trader you make your money by buying and selling. As an investor hopefully your asset gives you a little cash flow. When you turn a trade into an investment you have to count on that investment paying off better than the trades you could be making with the capital you have tied up. Surely there is something out there that you could be trading that will perform better than a losing investment.

If I can find any comfort in this misery is knowing you will reply with a plain and simple logical wisdom lesson that I now use as a grounding "what would deaddog do about this?"

Your reply, as the previous, came long after the damages were done, that is, after the drop was so significant that it seems almost preposterous to sell now and hope to recover by trading other shares. Essentially, I'm expecting the recovery to be as or nearly as profound and fast as the losses have been. In my defense, these stocks are pretty tightly correlated to BTC which, as we all know, can do just about anything.

I pretty much stopped trading in November, transferring my wife's and my 401k to cash then and a month later making a significant investment in TSLA, when the stock dropped sub $1k. My other significant (now) investment, is in the above mentioned cryptos and related stocks. Do I see BTC at $75k? Absolutely. I just expected it within a trading timeframe, but patience is a virtue.

I don't know how to read this market and prefer to stay away from it until I see signs of a real recovery which I don't see this year.

 

[Ed48]

...after the drop was so significant that it seems almost preposterous to sell now and hope to recover by trading other shares.

I was of the same mindset back in 2013, when I suffered a large drawdown (ie. it's too late to sell now). Unfortunately, it went on to become a far bigger drawdown, and I'm still deep underwater to this day. Lessons learned:

1) Think you know the worst case scenario? Think again!
2) A big loss can get a hell of a lot worse.
3) Some things can take years, if ever, to recover.
4) You don't truly appreciate risk until you've lost really big time.

I hope you fair better.

 

[deaddog]

but patience is a virtue.

Is it really. it's like saying good things come to those who wait.
Yep, I'm going to start a procrastinators club, as soon as I get around to it.

I'm not going to disagree that the market always goes up eventually. But that is the market, not individual positions. The market is smart enough to get rid of its losers.

Rather than saying patience I'd say self control is a virtue. Waiting for a high probability set-ups before you act is a good thing. Hoping, praying and having faith that a bad situation will turn around, not so much.

It's just luck if good things come to those who wait. For the most part good things come to those who take action.

So if patience is a virtue and if you don't know how to read this market and prefer to stay away from it until you see signs of a real recovery, what's the down side of going to cash and waiting for things to change?