It is well documented that the best traders do not anticipate, they react.
They observe the market moves and make their trades accordingly. If this happens, then I will do that.
Reactions to price provide empty space for a strategy to be executed. It gives us a moment to think and to be rational. It’s less about what *should* happen and more about what is most likely to happen. Most of a trader’s time is spent building a plan, not executing from the reaction.
As human beings we are wired to react. The dopamine system in particular is built for this. It is, by definition, a reward based system. Dopamine is released as a reaction to stimuli.
One could argue the human brain has not evolved as quickly as technology. Our reptilian systems cannot keep up with the speed of the world. We are socially engineered to react all day, every day. Nothing about consumerism is designed to slow things down.
Compound this with the crypto markets and you get the perfect storm for reaction. You have:
- Social media/social pressure/engineered rewards
- Unlimited information that is constantly updating
In bull markets we are in a state of constant reaction. Wake up, check the prices and react. Open Twitter, see what people posted, react. Check Discord, see the latest updates, react.
Living in this state of reaction favors the amygdala (reptilian brain) to be in the driver’s seat and the pre-frontal cortex (rational brain) to be on the sidelines.
The professional trader spends hours building a strategy to prevent this from happening. But most of us are not professionals.
Sure, you can fight it for a while but just wait until there is a little volatility and let me know how that works out (aka panic sell or fomo buy).
The hardest part is looking back and saying “What was I doing with all those hours?” and “Did all that stress make me more than holding?” It can be painful to have this honest conversation with ourselves, so we don’t.
We continue to react, diving deeper into the rabbit hole, following new people on Twitter, joining new Discords, hoping to find a better firehose that will lead to better reactionary decisions.
In contrast, I would offer a different way to approach your path to Valhalla.
Instead of mindlessly opening TradingView on your phone, ask yourself “How will I feel if I see these prices are way down?” or “How will I feel if these prices are up big?” Take a minute to visualize the screen and experience how it feels.
If you do this, you will feel a pattern interrupt happen. You will stop and force yourself to have a mini experience that is not a reaction.
You, not the markets, start to control how you feel. You have a choice.
Similarly, next time you open Twitter, ask yourself “What information could I get on here that would be helpful to me?” or “What exactly am I looking to get out of this experience?” You may find that you aren’t really sure. That’s ok. That’s the first step to stop mindlessly scrolling through information that does not matter to you.
This can be applied to all parts of life. Peter Attia MD talks about this mindfulness practice in “giving myself a pause between information and reaction.” That pause holds incredible power, even if it’s one second long. We reclaim our energy and reallocate to the parts of our life that need it.
I write this because I struggled with this for a long time, especially as prices were skyrocketing. It was exacerbated when I was living in scarcity mindset — I didn’t have “enough” money and I still needed to “make it”. Every day felt like an all out war to win. I reacted day in, day out.
Being further along in my crypto journey has given me a chance to reflect on this. It was all in my head. Working harder, reacting more intensely, living a life on adrenaline offered negligible alpha.
Taking my time to learn about cool projects, waiting for good entries and getting better sleep has generated mind bending alpha.
Our world is programmed to make us react. It wants us to react all the time. It wants us glued to our phones, refreshing prices, scrolling chat rooms and living on edge. It is convincing you that you’re being productive when in reality it’s just destroying your life energy.
Next time you pick up your phone, ask yourself what you hope to get out of it. Ask yourself what all this information is really doing to serve you.
Stop reacting, start strategizing.