Every beginner in crypto has one wish and that is having decent gains. And indeed it is possible especially in a bull market, but a lot of beginners realize soon that it is not that easy to cash in. This is because they are not aware of a hidden enemy that lurking to take over. In this blog I will reveal who that enemy is and how to deal with it.
The biggest enemy for beginners
Many beginners have high expectation when they start investing but one of the issues is that most beginners are unprepared for the crypto market. The crypto markey has a high volatility and value can rise and drop fast. Most well known examples are alt coins but also bitcoin has enough volatility. The consequence is that a profit can turn into a loss overnight. Then the biggest enemy of all traders kicks in: negative emotions. When these emotions take over bad decisions follow and these will result in bad decisions.
What triggers these emotions?
Since market directions cannot be controlled unprepared beginners with high expecations will start to feel uneasy. Most likely people with fears of missing out(FOMO) buy crypto at a high price when everybody else already took their position. Often sharp declines follow and they start to fear that their investments will be worthless. This is especially when they invest with money they cannot afford to lose. All uneasy feelings have one common root. The emotion is called fear. When fear takes over all good intentions are gone and bad decisions follow. Especially when fear triggers panic. We all have heard stories of people losing lots of money when they sell in panic. Often the whole crypto portfolio will be sold instantly and a massive loss is made by those individuals. But fortunately there is a better strategy to control emotions.
How to control the emotions?
In order to have success it is essential to contr your emotions. This can be achieved by preparing yourself properly before investing in the market. Not only is it essential to learn first but also having a good trade plan and formulating your own goals. When you prepare yourself for the crypto market you realize soon that that markets are always right and that you cannot expect anything from the market and that with a trade plan you can minimize your losses. That’s why it is essential to plan your losses in case the markets change directions. When you set a good stop loss you will not lose more than you have planned. This will contribute to emotions under control and better trades can be made. Also with a proper preparation better decisions follow.
My conclusions
All traders have emotions but the difference between successful traders and unsuccessful traders is the control of emotions. If beginners prepare themselves properly and create clear goals and plans before investing bigger progress is being made. With better prepratation FOMO and fear cannot take over and big losses can be avoided.
