Interest in cryptocurrencies rarely starts without reason. You can read an interesting article about Bitcoin, begin playing a crypto game, or make your first deposit in a best Bitcoin casino. The bottom line is that people see some particular advantage of cryptocurrency and want to know more.
Not everyone comes to trading. Some choose investments for themselves, and some are limited by what they know about cryptocurrency. If you decide to try trading, be prepared for different emotions. One of the primary skills of a trader is to manage these emotions. That is what we will devote this article to.
Emotions During Cryptocurrency Trading
When we talk about emotions in trading, many people might think that we are talking about happiness during a successful trade, but this is not the case:
- You need to understand what you can lose here. You can close a trade with a 10% loss or catch a liquidation. You must always be prepared for losses.
- You need to have the ability to stop in time.
- You need to remain relatively calm both after a successful and unsuccessful transaction.
How to do it?
Tips to Avoid Emotions During Cryptocurrency Trading
You need to avoid emotions – it sounds inhuman, but it’s a fact—the calmer and more balanced you close transactions, the better for you and your capital. Calmness helps you assess the situation and take the necessary measures.
Tip #1 – Know when to stop.
A good rule of thumb for many successful traders is to stop trading when a trade is losing. This helps you take the time to assess the situation, relax and start trading the next day, avoiding previous mistakes.
Tip #2 – Avoid some products before trading.
Many experts advise traders to avoid sugar (chocolate, pastries, juices) as well as alcohol, coffee, and tobacco before trading. The explanation is simple: all these products are involved in the formation of substances, such as dopamine, which affect our emotions and, roughly speaking, increase their manifestation. We do not need it – the less it influences your mood, the better.
Tip #3 – Start trading in a good mood.
You don’t need to sit down to trade when you’re upset or excited – you need to be balanced and ready to make decisions about trades. Many traders meditate or go to the gym before a trading session to calm their emotions.
Don’t let extraneous emotions influence your decision. The same goes for excessive joy – you can open unnecessary or irrational positions.
Tip #4 – Have a trading journal.
The trading journal helps you keep not only track of profits and expenses but also analyze each trade in detail. You can enter any data there – the reason why you closed the deal, time, profit/loss. Also, you can leave a field for future thoughts to return to the deal after a while and think about how this situation could be changed.
Tip #5 – Have a trading strategy.
This is a must for all the traders. First, describe the factors that you take into account when choosing a pair for a trade – a trend, indicators, any patterns, price changes, market volatility, and so on. By analyzing everything in detail and opening trade at a favorable price, you will have less reason to worry – at least. As a maximum, you will explore the asset in detail and understand whether it is worth entering this trade at all.
Trading Psychology – Final Thoughts
Too many traders underestimate the psychological factor. And in vain – sometimes it affects the deal’s outcome more than the analysis done. Never think that you are good enough to just go to the exchange and trade any asset, even if you already have years of experience.
You should always check yourself, but without anxiety. For the future, try to use the tips that we have listed in this article:
- Tip #1 – Know when to stop.
- Tip #2 – Avoid some products before trading.
- Tip #3 – Start trading in a good mood.
- Tip #4 – Have a trading journal.
- Tip #5 – Have a trading strategy.