Think Like statistician when investing in Crypto and Stocks.

Crypto and stock markets attract many new people and the main reason for the attraction is greed, sadly. So many people lose their investments in stocks and crypto just because greed overrides their ability to take calculated risks and evaluate the probability before investing.

People who earn healthy profits and multiply their investments are the ones who take small steps and meticulously analyze the chances of the profits they can earn. If you will think that your investments will be doubled or tripled overnight then, there are 99% chances that you will make a huge loss.

This is the fact that some people do earn 200%, 300% profits, or even more in months or weeks but how many such investors exist? Only a handful number of investors are able to enjoy such huge profits in such a short time.

You cannot take your investment decisions based on such a small sample of investors. If you start thinking like a statistician and consider the probability that how many people have earned huge fortunes in a short time only then, you will be able to make smart decisions.

Let’s understand with an example.

If there are 10000 people who have earned more than 100% profits in less than a month from stocks and crypto and the total number of investors is 1 million then, the probability that you will earn the same amount of profits is 1%.

Now, it is undesirable for you to get excited to earn more than 100% profit in less than a month on the basis of 1% probability. You have to keep in mind that if there are some people who doubled their investments then, there are a significantly greater number of people who lose their money.

Benefits of this strategy.

• People using this approach have a reasonable goal of profit, such people don’t set unrealistic expectations from the market.
• This strategy helps people to calm down their emotions and make a decision backed by concrete research.
• Setting reasonable expectations enable investors to develop a long-term plan and take advantage of compounding.
• For the new investors, it is even more crucial as this strategy helps them to reduce the chances of facing huge losses at the start.

Investors who do not consider the probability before investments often end up investing in penny stocks and highly volatile cryptocurrencies in search of massive profits and eventually lose their money. Thus, the statistician mindset helps investors to take stocks and cryptocurrencies as investments, not as gambling.