WHAT YOU DIDN’T KNOW ABOUT TRADING CRYPTOS
Most people jump into the crypto market with great enthusiasm, having very high expectations. One of the things they aren’t told is the stress that accompanies trading - having to read through bogus whitepapers, learning analysis, understanding market psychology and dealing with emotions.
One good thing cryptocurrency did is to give global access to everyone to try out their hands at speculative instruments. With a smart device and internet, you’re good to go – of course with a decent chunk of capital. However, it’s far from just that.
One of the ways to get going in your trading journey is to belong to a community of traders and enthusiasts who share the same interest. You can learn a lot in a short space of time and avoid mistakes you would have made going solo.
Trading and Patience
You need a lot of time to strategize before making a trade. It’s very necessary to avoid placing trades when you’re stressed as strategizing involves a complex thought process. You need your mind to be in a good state. I’ve personally had a couple of bad trades from making hasty decisions. Itchy hands will have you regretting more trades you made than the ones you didn’t make. After all, you truly didn’t lose any money by not being in a trade.
A lot of traders get carried away by impulse and jump in whenever they see the price rising. Eventually, they get burnt because they didn’t consider all other factors, including correlation to bitcoin. What they mostly forget is that the best entries are usually accompanied by loneliness and self-doubt.
We’ve had many stories of “rich in January - broke in February”. You do not need to attach your personal goals to the crypto market. Remember that the market does not care about your financial goals. There are no definite outcomes in the markets, hence, you must learn to think in terms of what it is – probabilities. Have percentage profit targets rather than dollar profit targets.
If you want to last in the financial markets, you’d have to work on your psychology. Learn to fail and fail again without losing enthusiasm.
For a lot of traders, they understand in theory that they need to have a trading plan. Sticking to it seems to be a harder nut to crack. A good way to increase your chances of sticking to your rules is by reviewing your previous trades.
Ask yourself questions like: Why did I buy? Did I wait for my pre-planned entry targets based on analysis? Did I stick to my exit targets or wait for a few more gains? Have I built enough mental and emotional strength?
It doesn’t matter what your answers are; you’ll have another opportunity to right your wrongs if you do an honest assessment.
Like I mentioned earlier, a very good way to become a better trader is to surround yourself with a community of traders who are just as smart, or smarter than you.
You might have made a couple of mistakes, but you don’t have to give up just yet. Every market always rewards consistency!