Markets 101: An introduction to "the game"
The Game
Markets are natural. They just happen.
Bill grew peas, Tom grew tomatoes and Anne grew peas and carrots. Anne has something Bill and Tom both need. Tom has something Bill and Anne need. Bill has something Tom needs, but Anne also has the same thing.
Anne's carrots will fetch a premium as will Tom's tomatoes. The market could be oversaturated in peas if both growers turn into sellers. If Anne really likes peas and plans to eat them all to herself, Bill's peas should hold the same value as the carrots and tomatoes. Maybe Bill plans to hoard his peas too! Now, peas are scarce and will fetch an even larger premium.
With the knowledge that peas are in high demand, Anne and Bill both take their peas to market. Tom sees two pea sellers and the market for peas instantly corrects as Tom is the tomato whale and sees two pea sellers and only one tomato hodler.
Bill could have made a backyard deal with Tom while peas were in demand and gotten cheap tomatoes rather than chancing the marketplace.
You never know quite how things are going to shake out, but, understanding how markets work will certainly give you an advantage in the market (markets are everywhere).
Housing Boom
There is a "housing boom in my city right now. It's all over the news and home builders are advertising. As a framer, all kinds of work is flying at me. People are telling me how much work they have for me... I tell them my price. They tell me that if I lower my price they will give me all kinds of work. To which I reply, I already have too much work. I don't need your work. If I am going to take your work, you need to pay me more than what I am being paid. That is me, understanding my market. There is too much work, and not enough me. What does that mean? I raise my price.
At some point during this boom, the shortage of skilled workers will get to the point where people will accept that prices need to go up. There is all kinds of money to be made building houses right now for people building and selling houses. In order to build and sell a house, you need to pay market rate to have a house built. Those rates are going to go up. I see it. Nobody has caved in yet, but it is only a matter of time.
BUT!!!
It is also only matter of time that the people out of work in Saskatchewan of Newfoundland catch wind of the housing boom in Alberta and decide to drive out with their tools to get a pice of the action. Prices could have gone up, but now, builders have new framers which will place downward pressure on the market.
The Hodler's dilemma
You know that a market is going to fluctuate. It is inevitable. Thing gets scarce, prices go up, people see this and want in on the price increase, price corrects.
To hold a coin long term, you need to forget about (smarter) or be tortured by the swings in the market. There is a lot of "could have's" involved with these price swings. Just remember... it "could have" gone the other way too. If you make the sensible decision to hold a coin long term, follow the old saying, "Set it and forget it."
Ya, But Crypto
Let's face it, most people in the crypto market are interested in the potential for gains. Some of us are fortunate enough to understand the paradigm shifting ramifications that come along with this technology, but more people are not there yet. They heard that there were gold in them there hills and grabbed their pick axe. (I bad grammer'd on purpose there.)
I, for one, believe that and want to help usher in this paradigm shift. Blockchain technology can eliminate a ton of bloated pointless busy-work, free up a ton of human time, and break shackles of debt-based slavery. If we are not careful, the very same forces that are making trillions on propping up a system based on debt-slavery will take over the blockchain (with their trillions of dollars) and we will get to play games of consensus (I will bring that to focus in another post, I promise). Remind me if the suspense is killing you.
I also see the market for what it is. It goes up and down and repeats. There are more than three vegetables and three people in the marketplace, so it is far more complicated than my first example, but, the same rules apply. I have been involved in crypto since early 2017. I watched it go up and thought that it would go up forever, I believed in the moon myth and that the moon was a final destination. When you get to the moon, find somewhere else to go QUICK!!!
There are a lot of people on that ship. Lot's of those people are going to see that they finally made it to the moon. They are then going to flood the market with sell orders. What happens when the market floods with sell orders??? The price goes down. If we add panic to the equation... then the market goes down faster.
Of course, there will be people that think that the moon was just the first stop on the way to some far off nebula, and they are going to "buy the dip". If the price drop is attractive to enough people, the buy orders will come in and stabilize the market, or potentially put upward pressure on it. This tug of war is always at play in every market.
If we are savvy, we can multiply our holdings by buying low and selling high. The problem with this is that it is hard to know when things are coming and when things are going, and, if we are trying to catch the next rocket ship, you might miss the one you were on by being impatient.
It is a game, and it is not easy to play. Especially if you do not have a plan, and do not have patience.
Rules to the game!
Nope. There aren't any. It is the wild west.
Suggestions for success.
- Have a plan
- Be patient
Proof of Brain
It is no secret that proof of brain is the newest sensation of a tribe on Hive. I have news for you though... POB tokens are part of a large market. They are at the wim of the massive, predictable forces. If the price of the token gets too high due to insane 90% stake rates of the diamond handed POB'ers. People are going to see opportunity to make money. This is how any token finds its value. People value it at $0.08 as a coin to hold, but once it gets to $0.40, they value it as their ticket to somewhere else.
Markets are free. Selling is great when you want to have that value placed into a different bag. Buying is great when you want to accumulate more. I want more POB. MORE!!!!
There are always opportunists out there. I am one of them. I will be placing buy orders to help entice sellers of POB tokens to sell. Other opportunists will see a good price to sell, and they will.
As more POB tokens get staked, more people are going to find POB tokens in their Hive-Engine wallets and will see it as free money. They will sell. Some people, like me, will see it in their wallet and be reminded about how they wanted to get involved in the project... and they will.
Time is weird
Some people live in crypto minutes, some live in 4 year cycles, some are thinking 25 years down the road. Everyone has their plan (I hope). Markets are always vibrant because everyone has a different plan. This means there is always a trade that can be made.
Make your plan first... then make your trade.
