By the end of this lesson you’ll be able to name eight habits of mind that can cost holders money, spot each one in its crypto form, and apply one countermeasure to each before you touch a button.
Start with the person holding the wallet
The researchers Brad Barber and Terrance Odean open their paper on trading with a line from Benjamin Graham: the investor’s chief problem, and even his worst enemy, is likely to be himself. The firms’ loss rates and the studies in lesson 1 are what that looks like added up.
The UK’s Financial Conduct Authority (FCA) saw the same thing one investor at a time. On 23 March 2021 it published research from a survey of 517 self-directed investors, and described a new, younger group getting into higher-risk investments.
Self-directed investors with under three years’ experience: a significant loss could have a fundamental impact on their lifestyle59%
Those surveyed: listed no practical reason among their top three38%
The same newer investors: agreed “I trust my instincts to tell me when it’s time to buy and to sell”78%
What the FCA reported on 23 March 2021. The three bars don’t share one group.
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