Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelertoing Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Investors: Are You in Danger of Emotion-Driven Decisions? You're Not Alone

InvestorEducation / Learning to Invest Dec 19, 2019 - 02:41 PM GMT

By: EWI

InvestorEducation

Or...Your Defense Against FOMO

As the winter holidays draw near, many of us will fall victim to the affliction we call "S.N.O.M.O." -- the Sudden Need of More Objects (to own, play with... and eventually, store in the basement).

Lists and budgets are no match for SNOMO once we take our first steps into a big-box store with its flashing signs and blazing blue lights. Within minutes, a powerful urge takes over and suddenly we're leaping in front of an old lady with a cane for the last cat-massage combing kit despite not knowing a single person who owns a cat, self included.


Our friends at Elliott Wave International assert that the same fear and emotion driving holiday shoppers to make irrational purchases ALSO drives the year-round speculation by investors in uber-hyped "it" markets.

To investors and traders, this phenomenon is known as FOMO -- the Fear of Missing Out. And we can't cure shoppers' SNOMO, for investors the ultimate defense against the sudden need of more is Elliott wave analysis.

The Wall Street bestseller and ultimate resource guide on all things Elliott., Elliott Wave Principle -- Key to Market Behavior writes:

"The Wave Principle exists partly because man refuses to learn from history, because he can always be counted upon to be led to believe that two and two can and do make five.

"He can be led to believe that the laws of nature do not exist (or more commonly, 'do not apply in this case') ... and that the fears which reason supports will evaporate if they are ignored or derided."

Essentially, the Wave Principle acts as a mood-stabilizer to man's innate fears of missing out on the next big thing. It provides a defined forecasting method for looking at markets, including a clear set of rules and guidelines, which govern the extent and direction of trends.

One of the starkest examples of Elliott waves combatting investor emotion comes via the recent history in bitcoin. In late 2017, the cryptocurrency had gone from a "fake," "fringe" novelty to the new darling of Wall Street -- after rocketing in 2017 alone from below $1000 per coin to above $20,000 by December of that year.

Every major company from Apple Store to Zappos to Playboy began accepting Bitcoin as a payment medium. Average citizens were literally mortgaging their homes to buy the "hottest new investment trend" (Dec. 12 Forbes). And mainstream analysts were re-upping their bullish bitcoin forecasts for the year ahead, as these headlines from December 2017 reveal:

  • "Bitcoin could easily reach $40,000 by the end of 2018." (CNBC)
  • "Bitcoin: Mystery Investor Bets a million it hits $50,000." (Forbes)
  • "Bitcoin Will Surge Above $100,000 in 2018" (CNBC)

As one Wall Street bitcoin strategist summarized in a December 22, 2017 article: "Make no mistake - the long-term bull market is firmly intact." (The Street)

The pressure to get in on Bitcoin before the next thousandth-percent price surge could be felt the world over. Investors collective emotion was at an all-time high, and most speculators espoused the sentiment alluded to in Wave Principle -- Key to Market Behavior -- namely; that the rules of nature and gravity didn't apply to bitcoin.

By stark contract, Elliott Wave International’s December 2017 Elliott Wave Financial Forecast took an objective stance based on bitcoin’s completed bullish Elliott wave pattern and identified the hallmarks of a late-stage bubble, issuing this warning to crypto-crazed investors:

"A rising sea of euphoria, ever-higher price projections and the capitulation of financial sophisticates only reinforce our stance:

"We are more convinced than ever that bitcoin will disappoint its late-coming enthusiasts."

Result: From its December 2017 peak of near $20,0000 Bitcoin plummeted 70%-plus to below $6000 per coin in just two months! (By the end of 2017, bitcoin was trading near $3000, an 80% crash.)

In fact, the first quarter of 2018 was the worst period for cryptocurrencies in history. Here again, Elliott Wave Principle -- Key to Market Behavior offers singular insight into the psychological machinations of this type of market's reversal:

"Panics are sudden emotional mass realizations of reality, as are the initial upswings from the bottoms of those panics. At these points, reason suddenly impresses itself upon the mass psyche, saying, 'Things have gone too far. The current levels are not justified by reality.'

"To the extent that reason is disregarded, then, will be the extent of the extremes of mass emotional swings and their mirror, the market."

For any investor, fomo begets disappointment and regret. Yet, nobody is immune. In October 2017, JP Morgan Chase's CEO called bitcoin a "fraud" and said, "If you're stupid enough to buy it, you'll pay the price." Two months later, amidst the crypto hype and glitz, the bank started prepping its clients for investing in bitcoin futures on the Chicago Mercantile Exchange.

A new bitcoin-like "it" market is born every day. Whether you approach those markets led by emotion, or by a clear Elliott wave discipline, is your choice. All free Club EWI members get instant, no-cost access to the complete Elliott Wave Principle -- Key to Market Behavior the minute they sign up. Join them today and learn to keep your emotions in check with Elliott wave analysis!

Who is Elliott Wave International? EWI is the world's largest independent technical analysis firm. Founded by Robert Prechter in 1979, EWI helps investors and traders to catch market opportunities and avoid potential pitfalls before others even see them coming. Their unique perspective and high-quality analysis have been their calling card for nearly 40 years, featured in financial news outlets such as Fox Business, CNBC, Reuters, MarketWatch and Bloomberg.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules