It’s a law of the stock and now the cryptocurrency market: newbies or “noobs,” as they’re affectionately called, have weak hands.
It’s a way of saying they’re getting easily scared by rumors or volatility and sell off when they shouldn’t.
A weak hands’ reaction to pricing shift is often disproportional at best and downright suicidal most often.
When the markets are volatile it’s clear that too many weak hands are holding assets.
Whales with their predictable pump and dump strategies know well how to shake those trees, and those fickle, bleeding investors will flock back in when the tide turns — and prices are higher again.
Here’s a typical scenario:
A weak hand bought in and prices are flat. The weak hand doesn’t sleep well. Then a rumor hits. Or exchange bots start doing their thing. Prices fall. The weak hand sells.
- panic sell
- market back to normal
Countless hours of despair can be avoided with a bit of calm and foresight.
Think of it. You made a strategic decision to buy and hold. You made an investment and want to touch it a few months or years down the road.
Then you get nervous when prices dive. You freak out when prices dive a bit more. You panic when prices crash, even though it’s a paper loss and after the downside volatility there’s upside volatility.
It is illogical bordering on stupidity to change a position when none of the relevant facts are changed, as it’s the case most often.
But shit happens when noobs are only staring at charts 24/7. Take a walk! Meet a friend!
Granted, one of the basic laws of being a weak hands investor is to buy at the top and sell at the bottom.
That’s a rule everyone has to go through.
You’ll learn. The hard way.
Stick to the plan. Emotions gonna kill you.
It’s simple really. Just HODL.