The most difficult task in market speculation is not prediction, it is self-control
Trading Psychology Tips
The way you deal with your emotions is vital for trading performance. It is paramount to understand that trading is not a battle of you against the market. The real battle is you against yourself, so learn how to use the most of trading psychology and then you can successfully trade any asset.
Successful trading may be difficult and sometimes frustrating. Making too many decisions in crypto is exhausting, and one of many ways to avoid it is to have a trading plan or systematic thinking, so you can stop emotions from killing your gains.
We're victims of emotions and biases. By designing systems, you are creating investment software for your brain, it makes life easier and simplifies everything, making you more objective about your decisions. Systems are a set of behaviours and habits that, if executed consistently, will nudge you towards your goal.
As James Clear said:
You do not rise to the level of your goals. You fall to the level of your systems.
As an example of a system for buying Bitcoin: every Monday morning, the first thing you do after breakfast is to buy an X amount of BTC, independently of the current market situation. You just buy with your eyes closed. Of course, that is an example, but if executed consistently, it becomes a system, and you get yourself free from taking decisions, and timing the market, you just start to save your brain energy for other important decisions.
So, three simple things to do when trading:
Plan your trades:
Set goals, when will you take profit? How much can you afford to lose? What goals do you expect for each trade?
Trade your plan:
Planning a trade and not trading your plan is the same as having two slices of bread, throwing some butter on one, and eating the other instead.
Keep records of your trading results:
Keeping records of your trades helps you to figure out what works and what does not. So you can optimize your decisions and enhance your trades.
It is important to be disciplined. Every trade you take must begin with a plan in your mind. When trading, it’s your job to stay organized at all times. Discipline is freedom.
The consistency you seek is in your mind, not in the markets.
by Mark Douglas.
Results are all that matter in the market, not opinions. Beginners stay emotional and miss opportunities. Professionals trade where money is. Look for results, forget about being right.
Markets are never wrong, but opinions often are.
by Jesse Livermore.
Greed drives people to invest outside their normal comfort zone. To be profitable, learn to never enter at the wrong time against them.
Markets can remain irrational longer than you can remain solvent.
by John Maynard Keynes.
Emotional control is the key to successful trading. Avoiding jumping into irrational pumps and having the patience to buy at the right time is hard, but it pays out. If you are confident enough about a project to buy at an ATH, why will you not be confident to buy the same project when it is cheaper?
You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.
by Warren Buffet.
Don't be afraid to liquidate a losing trade, there is always a new opportunity in the markets, every day. Do not fall in love nor marry a project. So try not to sink with your losses, as there are plenty of other ships to sail, and you need to have the liquidity to ride them.
These are just some tips from successful traders, they are not necessarily rules. We know the crypto markets are always changing and evolving, and we need to be adapting to survive and ride its waves every day. Just don't forget, the enemy is yourself, discipline and emotional control are key elements to constantly taking profits from the markets.
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Crypto researcher, investor and trader. Technical and data analyst.