Anxiety, despair, anger, euphoria, and confidence in controlling the market are the main enemies of your deposit. It often happens that newbies on the cryptocurrency market are unable to cope with their emotions. This leads to the fact that almost every deal closes in the negative. Then the trader can’t stand it and quits everything at the initial stage without trying to learn how to cope with worries. In this article we will talk about how emotions in trading can ruin your deposit and what to do about it.
How emotions can negatively affect trading
Experienced traders know how to cope with their emotions, which cannot be said about beginners who at the initial stages feel great psychological overload. Novice traders immerse themselves in trading strategies without paying much attention to psychological preparation. They underestimate the problem of emotions and later pay with the deposit.
The authors of books on trading often tell that emotional discipline is the key to success in trading. When traders give in to fear, panic, ego or greed, serious mistakes begin to be made.
Fear and Anxiety
Often anxiety can become a constant companion and background of a trader. If you start to feel it, it’s a reason to think that maybe you need to change something. Of course it’s hard to part with your money, ambitions and dreams. But it is important to understand that chronic anxiety easily prevents you from making the right decisions. In turn, fear will not allow you to adequately perceive reality.
At what points does anxiety and fear in trading manifest itself:
- Exiting a profitable trade too quickly and too early;
- Fear of closing a position on a stop loss.
Greed and impulsiveness
You have to understand that you are trading, and trading means strategy, patience, and a sense of proportion. The exchange does not work according to the casino principle, where you play and you are controlled by gambling.
If you do not stop it all in time, you will lose in this “game”. When a trader is disciplined, he gradually increases his income and follows the developed trading strategy.
How greed and impulsiveness manifest themselves in trading:
- Lack of trading strategy;
- Unsuccessful deals with high leverage;
- Deals on trend reversals.
Overconfidence and inability to admit mistakes
Aggression and anger are not uncommon among traders on forums. The reason is the psychological inability to accept failures, excessive self-confidence and lack of understanding of the market. In addition, it is connected to the ego which is a serious enemy for every trader.
After several successful trades the beginner may start thinking that he/she has some control over the market. After that inevitable failures and desire to take losses from the market begin. Subsequently, a “roller coaster ride” occurs, which is based not on the quality of the deal, but on its profitability.
How overconfidence manifests itself:
- Attempts to pay off a losing position;
- Excessive trading without regard to market volatility;
- Refusal to place stop losses.
How to learn to deal with your emotions
Emotions make our daily life brighter. But a successful trader makes decisions only when he or she is calm. Learning to control your own emotions is possible.
Realize that losses in trading are inevitable
The cryptocurrency market is highly volatile. That’s why you can’t be 100% sure of what you can’t control. Trading is a risk. And risk in turn is loss. You have to learn to accept it.
You should not ignore stop-losses, and if the price reaches their level, the position must be closed. Yes, this can be unpleasant, but you were able to stop in time, saving money and nerves. You have shown discipline – an important tool of a successful trader. Many newcomers to trading often have the thought that the price is about to turn around and they can get back the money they lost. However, it is impossible to be sure of it. No one can know how the assets will behave tomorrow, some world situation can happen that will make everything crash. You don’t have to go far for examples. Last year it happened because of China, whose authorities have almost completely banned the mining of digital assets. And just recently there were rallies in Kazakhstan, during which the Internet was cut off across the country and as a consequence, mining was suspended in the country, which had a negative impact on the rate of the first cryptocurrency.
Trader’s discipline should also be shown when closing profitable transactions. Greed often ruins a trader – who does not take the profit in time. The market can suddenly go in the other direction, so you should not regret that you did not take everything. In this regard, profit should not be ignored. A trader’s profit is a result of accurate calculation.
When a trader has a losing trade – he wants to get even. This is a serious emotion that must be tried to stifle immediately. It is necessary to take a break and cool down, reducing the emotional intensity.
Emotions in the market often play a cruel joke on the trader. Do not forget to rest. Take a break after a series of failures. You need it in order to see the market with fresh eyes, not clouded with recent losses. The main thing that must be brought up in a beginning trader is discipline. If you have it, then during failures you will be able to control yourself and not make additional mistakes. But to start trading on the top exchanges today, we recommend you to pay attention to the trader’s assistant – trading bot. One of the leaders in this segment is RevenueBot. The service provides the opportunity to create trading bots on the largest cryptocurrency exchanges: Binance, Bittrex, Bitfinex, Exmo and others. Creating a bot is free of charge, the service will not take commissions until the client begins to make a profit from trading the bot. With the help of deep settings of the bot, the service’s clients implement trading strategies that are problematic to experience in normal trading. We will immediately indicate: the bot does not have access to customer funds on the exchange, but trades using API keys, that is, the account will remain out of access. RevenueBot has over 35 thousand customers who earn money thanks to trading bots.
Why should I choose this service?
- Pay the commission only after making a profit.
- The bot settings open up a variety of ways to make a profit.
- Inside RevenueBot, a marketplace is implemented where customers can buy a ready-made bot so as not to bother creating their own, or sell their own if the configuration has shown efficiency. Also, the services of a mentor (an experienced customer of the service) are purchased on the marketplace, who is ready to answer the questions of newcomers. Over time, you can become a mentor yourself, getting additional profit for this.
- Regular updates of the service’s features that optimize the trading process.
- The presence of the RevenueBot referral program allows you to earn money on trading, even without resorting to trading. Attract new customers for the service and get up to 30% of the profit they receive every month (but not more than 15 USD).
This is a small list of the advantages of the service. You can continue to list the positive qualities of RevenueBot, but why do this if you can go to the official website of the service and see for yourself everything? It is highly recommended to make decisions faster, because the crypto market does not stand still, but grows at exorbitant steps. Who knows how much profit is missed by someone who does not dare to come and start trading with RevenueBot.