Advertisement

100X Leverage Trading With PrimeXBT 

 

Crypto trading psychology is very important to how successful a trader will be. Even with the best education, a poor mindset will leave you broke. Not everyone is cut out for trading.

Some never have or never will have the right skills and mindset to be able to trade effectively. Never has this been more noticeable than in Cryptocurrency. 2018 has been a very tough year for many trading in the Cryptocurrency markets.

Advertisement

Cryptocurrency Courses From £5 | Mega Discount Inside (Limited Time Only)

WIN $250 WORTH OF BITCOIN

Even the best traders who are experts when it comes to technical and fundamental analysis also rely on a certain amount of intuition, feeling, and understanding. There are many factors that can affect how you plan, set up and execute a trade that comes down to psychology. Let’s take a look at some of the things to watch out for when trading.

 

Crpto trading psychology-the basics
Trading crypto- how much is in the mind?

Greed in Crypto trading

Greed can be both a huge positive and also a very big negative when trading. The infamous quote by Michael Douglas from the hit film Wall Street “Greed is good” is world renowned. It’s also missing an important part. In some circumstances, greed is most definitely a good thing. A traders greed can be the difference of settling for a 5% profit on a trade or 10%.

Often though it’s done in all the wrong ways. Trying to squeeze those extra few percentage points in pure blind hope. Even with all the indicators telling you to take your profits and run.

While having the drive and thirst for more profits is great always pay attention to the market and your analysis. Profit is profit. Don’t fall into the trap so many make and turn winning positions into losses.

 

Crypto trading and fear

Where greed is partly fuelled by overconfidence the exact opposite could probably be said about fear. And just like with greed fear can be both a good and bad thing dependant upon the situation.

Fear of failing or losing can force a trader to be too quick to take profits. This is again despite the indicators suggesting there may be room for more. This is a safer tactic perhaps than being greedy. Especially in more bearish markets. Banking fewer profits are still profit. However, in a bull market, this tactic is likely to lead to significantly fewer profits.

A cautious approach is great but try not to let the fear cloud your judgment and your analysis. Where possible set a stop loss when prices pass your minimum targets. This allows you to secure those profits if the market turns but it also allows the scope for much bigger profits

 

Crypto trading psychology- The basics

Regret

Regret is very different from greed and fear. It is mostly born out of either missed opportunities or overconfidence in previous trading experiences. Previously passing up on a great opportunity or failure to have acted in previous trades and opportunities can cause many traders to be either overzealous or too afraid to take on a trade or opportunity.

It is hugely important when trading to take each opportunity as it comes. While it is difficult to not rue missed opportunity or regret not taking profits you have to take each trade on its own merits. Trust in your analysis and in your gut!

 

Crypto trading psychology- the basics

Intuition and Crypto trading

As you gain more experience intuition plays more of a part in your trading. This is because the scenarios and setups are recognized by your brain automatically. You may have seen almost identical charts hundreds of times and your brain will pick up on the most likely outcome.

Use your intuition to your advantage. Use it as if it is another string to your bow. Intuition has kept humans alive for thousands of years and while some traders will value intuition above all else the very best traders will use it as an aide. If it matches up with their analysis and the market sentiments go for it.

I’ve fought against and gone with my intuition many times in my trading career so far. I have not been successful every single time but more often than not our first instinct tends to be right.

This also helps to stop you from overanalyzing a chart too. Sometimes as traders, we are guilty of wishful thinking when we are looking at charts and trying to force ourselves into seeing a pattern that isn’t there.

That’s all for the basics of trading psychology. If you want to learn more about some of the basics of crypto trading check out our education section here or for more information about investing in and trading Cryptocurrency check out this course by Low Cap Crypto CEO Ash Davidson right here.

 

Advertisement

Get $10 Free Crypto | Open Your Bybit Trading Account Now

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.