Teeka tawari

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Teeka tawari

2025-01-07T00:20:10-05:00 -

It's an old but true adage that these markets love to climb a wall of worry and tumble down a slope of hope.
The latest injection of fear and volatility actually builds the base for the next move higher, and gives investors an opportunity to add to existing positions and enter new positions at much more favorable prices.
Remember, it's been an incredible year in equities and crypto.
Despite the recent pullback, the S&P 500 is up as much as 23% this year, and Bitcoin is up as much as 130%. That price action has fueled an enormous increase in bullish sentiment.
In the crypto markets, that has led to an over abundance of leverage
- and we need to see this leverage washed out of the system before volatility tones down.
Leverage takes time to flush out. On every market rally, the leveraged player hopes and dreams the market will bail him out.
But it doesn't. What happens instead is you see a series of violent sell-offs that look like the beginning of a bear market. What they are instead is the market shaking out the overleveraged weak hands.
Here's what I want you to focus on: We're still in the early innings of the melt-up phase of the current bull cycle. And in this phase, the pullbacks are violent.
In the early melt-up phase, there will be face-melting rallies and face-melting pullbacks.
So how do you manage the emotions that come with all of that?
First, you acknowledge the nature of this asset. Crypto is inherently volatile. That's the price of admission for making life-changing gains.
Second, you manage risk by using uniform position sizing across your positions. By having uniform position sizes, you don't overown a loser or underown a winner.
And third, when it makes financial sense, you use pullbacks to either add to your positions or to put on new positions.
That's how you take advantage of volatility. You find great ideas and buy them when everyone else is panicking.

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