When you clicked in, did you think this article would talk about how to overcome human weaknesses? Damn!
Human nature is evil, greed and fear are something that can never be overcome. Everyone has them, especially in the contract, futures and foreign exchange markets, where twists and turns and uncertainty are the norm!
Moreover, the fear and greed of leveraged people will be magnified with the leverage multiple. Risk and return are always proportional. Only considering the return without considering the risk is called ordinary faith, which is the most deadly.
As a "three-no" product in the financial market, with no funds, no technology, and no news, it cannot overcome fear and greed and will not survive for long!
So how do we obey the weaknesses of human nature and find opportunities in fear and greed?
If you can't beat them, join them! The market will not produce results just by your efforts alone. The underlying logic is like your dead love and vanishing spirit. The market is not about who gets crushed, but who survives to the end!
Today we will talk about how to construct the Fear and Corruption Index
First we need some tools to watch the market
trade view Of course I use coinglass
Market decisions are driven by the two emotions of fear and greed.
Fear and Greed Index 0-10: The market is extremely fearful, a signal of a phased bottom, and there is not much room for decline. At this time, you can buy the bottom in batches;
Fear and corruption index 10-30: market fear, gradually recovering when the market recovers;
Fear and Greed Index 30-70: Neutral, boring market, unclear direction, sex date; slowly build positions;
Fear and Greed Index 70-90: Greed, peaking at certain stage, suitable for rolling positions and going long on pullbacks;
Fear and Greed Index 90-100: The market is extremely greedy, reaching a peak at certain stages, and selling in batches
I hope this article will give you a preliminary understanding of the fear index. The fear index is a good measurement standard. Of course, I still hope that investors will not refer to a simple signal alone. Only comprehensive and rational macro thinking can obtain a profit range.