Cryptocurrency trading is an interesting and fascinating process and at a glance it seems simple. In fact, the main enemy of a novice trader is his emotions. When making decisions in the course of trade, it is necessary to keep a cool mind.
In trading, there is a psychological technique called FUD - when the news channels propagate deliberately false information, in order to influence the trading decisions of the audience.
Another move in trading called FOMO is when traders are afraid to lose profit, so they are struggling to buy a rapidly growing (or sell a cheaper) asset right before the trend change.
As you have already understood, the destructive emotions that dominate traders are fear and greed. Lets analyze the main mistakes of beginners:
- Player syndrome - when a beginner opens a large number of deals without considering them, crypto trading becomes a roulette (lucky/unlucky);
- Premature exit from the deal - as soon as the trend changes, the trader gets scared and sells the asset so as not to lose money. After a certain time, the schedule is restored, but the profit is already lost;
- Self-confidence - the euphoria of success forces the newcomer to open deals based on previous success. To avoid this, experts recommend limiting the number of transactions per day and withdraw profits.
As you can see, emotions make crypto traders make rash decisions and lose money. Before trading begins, you need to develop a trading strategy, keep records of transactions, and in case of the acquisition of emotions over the mind, close the terminal. This way you will secure the deposit and in time learn to trade successfully.