Emotions: The crypto trader's nightmare | The success killer | The way out

mechanicalpip (36)in #crypto • 7 years ago (edited)

Your emotions are a slave to your thoughts, you are a slave to your emotions

Source
Have you ever wanted to buy a particular coin but stopped, only for the coin to reach it's ATH(All time high) and still race for the moon?

Or when a trade was already winning but you decided not to take your profits, knowing fully well that there is a significant resistance level just close to the current price?

Let us leave cryptocurrency market for a moment and look into our daily lives. Have we ever wanted to start a business or learn a particular skill but because not too many people where into that line of business, you declined. Few years later, people that entered are raking in profits.

These are common deadly emotions that we exhibit on a daily basis. They are obstacles to progress and prevent success.
They are: Fear, Greed and Regret

Fear

Our number one enemy.
It cripples the heart of man and makes him unproductive.

We are always afraid, not because we want to but because we have no idea what tomorrow will bring

This has made a lot of people to not make that winning trade or start that company. If we are to progress in life we need to rise above our fears and stand firm in hope.

Source

Regret

When the trade eventually shoots for the moon and you are not on the rocket, or are you like those people who sold all their Bitcoin when the price reached $1000 last year only for the price to shoot up to $19000 the same year.

Regret is a bad feeling, it is the leading emotion in suicidal thoughts.

Fear is temporary, Regret is forever

Greed: The insatiable hunger

We sometimes leave a trade open longer than expected defying all analysis. People who feel the market is a "get-rich-quick" scheme, have lost all their capital just because of this mindset.

But how can we overcome this feelings?
Can we leave above Our emotions or Are we powerless compared to our emotions?

We can't escape out emotions.

What if I told you we can turn these seemingly deadly emotions in our favour and thereby succeed in our endeavors?

The Way Out

... Nothing seems fixed.
Everything is always changing.
We seem to have very little control over our emotional life
- Sherwood Anderson

Breathe

It is not the end of the world and neither is the market going to crash any time soon. It might just be the time to shutdown the system and go to bed. Have a good sleep, clear your head, other issues might be bothering on your mind.

Emotional Indicators

Our Emotions can be used as an indicator, an emotional indicator. It would work the same way our technical indicator works. Fear as a lagging indicator and Greed as a leading indicator

Our Fear could show us that we are holding back, defying all technical analysis while our Greed could tell us that we are not sticking the strategy. Monitor your emotions, they might just indicate that you need to take a step back and access your current position clearly, who knows your emotions might just be right. So once those emotions show up, stop and re-access your decision.

Keep a detailed trading journal.

A trading journal would help you to access your wins and losses. This will help you monitor your progress over time and know if you entered a trade based on emotions or you followed your strategy.

Source: The conscious Mind

Basic information to be added to the journal are:
1.Date
2.Time of entry
3.Time of exit
4.Entry Price
5:Stop loss price
6: Take Profit price
7:Currency Pair
8:Lot size
9: Leverage
10: Strategy
11:Risk to Reward ratio.

Knowledge and Practice

An investment in knowledge pays the best interest -Benjamin Franklin

Study to show thyself approved...

Study the market, know the fundamentals, understand price action and technical analysis.
Ensure you avoid Recency Bias(Paying attention to recent price movements while ignoring the "Bigger Picture",
Open a Demo account, PRACTICE, get familiar with price action. Build up your emotional indicators, Train yourself to be an "emotionless" Trader
Know where you stand, Are you an "Hodler" or a Trader? This might just tell you if you are analyzing the wrong timeframe.
Open a demo account, treat it as a real account, Master your strategy before you open a real account. Or you could open a cent account.

Adequate practice waters down emotions.

Join A Forum.

Share your experiences with others, Talk about these emotions.
Thanks to steemit, there are so many communities, projects and fellow steemians that can help. Here is a list, You might just find the one that you like:
@adsactly: From crypto to travel to sports, There is a lot to learn in this community
Telegram channel:https://discord.gg
@ulogs: Although it is a little bit different, you can start a daily trading journal log. Tell people about your emotions and your experiences. Trust me they are cool

For crypto news and technical analysis, checkout:
@jrcornel
@haejin
@quickfingersluc

Your emotions are important, do not neglect them, use them to improve your trading entry and exit.