In any field, there are terms that we need to learn and FUD in trading coin investment is one of them. So what is FUD, what consequences does it cause and how to overcome FUD? Let's find out through the article below!

I. What is FUD?

FUD is an acronym for Fear, Uncertainty, and Doubt. This is a popular term in the investment community, especially in the field of cryptocurrency trading (trade coin).

FUD is used to refer to strategies or actions intended to create fear, uncertainty and skepticism in the community, with the aim of creating a negative impact on the overall market and the value of asset classes in particular.

The term “fear, uncertainty and doubt” has been in use for about a century, but it became popular with the acronym FUD in the 1970s and gradually became more widely known thanks to the Cryptocurrencies are highly volatile.

People who generate FUD are usually organizations or individuals (KOLs). In order to serve their own interests, these subjects used this effect to cause confusion in the community.

FUD is also used throughout the financial sector and can be applied to any asset class.

II. What are the investment consequences of FUD?

Now that we have an idea of ​​what FUD is, what impact does it have? Positive or negative?

The main goal of the creators of FUD is to cause confusion, fear and lack of trust in the market or a particular asset class. This can lead to asset classes losing value and affect the investment decisions of market participants.

In some cases, the FUD occurring may be justified, but in general, the term is used to describe overwhelming, irrational negative sentiment in the markets.

FUD causes some investors to feel nervous because they have invested too much in an asset class or too late (or both). Some other investors worry that an unforeseen factor could affect their investments. Or more macro, FUD can make the community fear a market-wide crisis.

When cases of FUD emerge, the community begins to discuss the rumors and spread in the media (and social networks) leading to impulsive, irrational decisions that hurt the company's bottom line. Investors.

III. What are the symptoms of FUD syndrome?

Usually people with FUD syndrome are new and inexperienced and have signs such as:

1. Psychological instability

People with FUD syndrome are often people who easily fall into a state of anxiety and panic. The psychological conflict will make them doubt their previous decisions.

FUD is often spread through rumors, unverified information, or distorted information; causing confusion and concern in the investment community.

2. Not having a trading plan before entering an order

FUD is often spread through social networking sites of projects or fraudulent organizations. The FUD message is widely shared; People who do not have a plan when trading are often susceptible to FUD syndrome because they do not have the initiative to plan, so loose knowledge can easily lead to sell-offs, affecting profits.

3. Participate indiscriminately in groups

News of FUD is spread everywhere and often appears in informal groups. Members who do not identify sources of information in these groups are often easily led astray and make wrong decisions.

4. Newbie, not much experience

Newcomers without much experience are often susceptible to the FUD syndrome; Their psychology is easily influenced by immature analytical techniques.

III. Classic FUD cases

Some of the FUD cases that can be mentioned in the market include:

Elon Musk

Maybe you remember when Elon Musk - CEO of Tesla - announced that he would not accept payments in Bitcoin in May 2022. This statement had a major impact on the value of Bitcoin, causing its price to drop about 5% immediately and then drop 13%, leading to Bitcoin trading below the $50K threshold and reducing its market capitalization. down to more than $360B.

Previously, Elon Musk touted Bitcoin as a potential anti-inflation tool and many large banks and famous investors, including Tesla, have bought and held large amounts of Bitcoin. Tesla's sale of Bitcoin has been profitable for the company. Elon Musk contributed to Bitcoin's price increase, but also decreased its value through his statements.

Similarly, Dogecoin cryptocurrency was also affected by Elon Musk's statement and decreased by 30% in a short time. However, soon after, Elon Musk "changed his mind" and by accepting payment in Dogecoin, the value of Dogecoin increased again by more than 25%.

Bitcoin in 2017

In addition, government entities also have a great impact on FUD, for example in 2017, when the price of Bitcoin peaked at nearly $20,000, a strong wave of FUD poured into the market and reduced the price of Bitcoin went from its peak to around $6,000 per coin in just a few days.

Some attribute this sudden drop to regulators in the US imposing large capital gains taxes on Bitcoin holders, while others blame the introduction of contract trading Bitcoin future.

IV. 4 steps to overcome FUD in trading coin investment

To avoid being affected by FUD in investing, users need to comply with the principles below:

4.1. Master knowledge

Knowledge plays an important role in avoiding being swayed by FUD news. Because when there is information about FUD, if a person is not very knowledgeable about the problem or project, he will not be able to maintain his mentality and will easily be led by the information.

4.2. Verify information, use official sources

To overcome FUD information, readers need to research and verify the source and authenticity before trusting such information. In addition, it is necessary to use official and reliable news sources to update market information.

4.3. Keep calm, limit trading according to news

Faced with negative FUD news, readers need to stay calm, evaluate the situation carefully, and trust their investment decisions based on quality information and personal knowledge.

4.4. Determine your investment style

Investing is like a sport and each person will have their own way of playing. Not everyone is a holder or not everyone has to become a trader. Those who have found a way to play for themselves will maintain a stronger mentality in the face of false information.

Determining your investment style is an important factor in determining decision-making in dealing with the impact of FUD. For example, those who choose a short-term trading style will be more affected.

V. Conclusion

In investing, earning money is important but keeping money is even more important. And avoiding being affected by FUD is one of the things investors must definitely do.

The important thing to do is to recognize what is FUD and check information carefully before making an investment decision. Mastering your knowledge, following trustworthy sources, and identifying your investment style is the best way to overcome FUD and make the right investment decisions.

Above is all the information about FUD. Hopefully through this article you have a clear understanding of what FUD is!

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