Thinking Differently

Price can rise or fall at any point in time. There is no absolute guarantee in the future of an event occurring. It does not matter if price is at support, if price is at resistance, or if price has fallen by 20% in one day. These events and price scenarios can increase or decrease the probability of future events occurring — just not to the level of absolute certainty. 


Many traders use hard rules such as ‘never sell at support’ or ‘don’t buy when price is crashing’ or you’ll catch a falling knife. The problem with these rules is that they are too narrow and do not account for variance in trading strategies and approaches. 


What I would ask those traders who use hard rules such as those listed above is, “Price is at support. If there is a 70% chance that price falls 1000 USD today would you still not sell at support?” Any rational trader would sell in this scenario and attempt to buy back lower. 


Remember, there are no absolute hard rules when it comes to the decision-making you make in trading/investing. Rather, there are events that occur that can heighten and lower the probability of certain future outcomes occurring AND there are certain things you can do to manage your risk. The sections within the HODLer will aid you in recognizing those events and taking actions that will lower your risk and heighten your reward.