Five Ways to Stay Sane as a Cryptocurrency Trader
Trading cryptocurrencies is a proven way to make an income. Depending on how good you are, you can live off your earnings from cryptocurrency trading. There are a lot of moving parts when you are trading. Most times it can be very confusing. Internet clichés that 90% of all traders lose money does nothing to relieve the stress. Many traders end up falling into spirals of depression, which sometimes have dire consequences. You need to find strategies that you can use to stay sane. Keeping your head is half the battle. This article shows you how you can do that.
1. Having a Trading Plan
One common reason traders end up feeling pressured is because of the lack of a trading plan. Cryptocurrency markets can have high volatility. Not having a trading plan means that you are always in reaction mode. Staying glued to the screen watching every movement on the charts is not helpful. It doesn’t help your trading or your health either. So, you need to have a plan which covers all aspects of a trade. The entry, management, and exit must all be considered. You need to make trading a mechanical process, devoid of all emotion. That is the only way to keep your head.
2. Have Working Hours
Cryptocurrency trading differs from stocks. You have access to the cryptocurrency markets 24 hours a day. Having an extended trading period is great and convenient. But some traders are so gripped by the fear of missing out that they end up going at it for hours on end. You need to identify the perfect time for you to trade. When is the market most volatile? Pick that time because that’s when you will see the most opportunities. But remember to leave time in the day for other activities. Do not let the fear of missing out get the better of you.
3. Take Time Out
Having time, separate from the charts is a fantastic idea. In many instances, you will see traders checking if the candles are moving towards the take profit on the phone. This constant focus on price movement can have harmful implications on your overall health and social life. Decide to take time out from everything to do with cryptocurrency. Use that time to go out with friends and have a good time. If you cannot go out, that’s okay too. You can even learn how to play online blackjack UK in the comfort of your home. Just make sure you keep your mind off the markets.
4. Have the Right Attitude
Many new traders get into cryptocurrency with the wrong attitude. You see all these flashy Lambos on the internet and instantly have imaginations of getting rich quick. That pressure can lead you to use money that you cannot afford to lose. You do not need that, especially when you are new. Most pro-traders will tell you that the battle starts and is won in the mind. You need to have the right psychology and be in it for the long haul. Accept that you will need some time before you get up and going, and learn the ropes first.
5. Do Not Sweat the Small Stuff
Cryptocurrency trading is a game of numbers. You need to make sure that your winning bets rack in more profits to offset your losses. Depending on your cryptocurrency trading strategy, your winning rate will most likely be less than half. That’s why you need a healthy risk to reward ratio. So, if to you getting every single trade correct is important, then maybe cryptocurrency trading might not be a good idea. Accept that you will get some losers. It’s part of the game. If you play your cards right, you will minimize the damage. Just close off that loser and move on to the next.
Keeping your head is one of the most important things you should do when trading cryptocurrency. You can only do this if you take the emotions out of your system. Understand that your mood and overall wellbeing have an impact on how you trade. What good would it do you if you got that winning trade, but at the expense of your health?
Featured image: Investopedia