How to Control Emotions to Win Yourself When Trading Cryptocurrencies

It can be said that the psychology of trading is always the most important factor for a successful trader. The more experienced traders understand that maintaining a comfortable mindset will help them stay in the market longer. And start earning more profits. What Is Trading Psychology? The psychology of trading is one of the factors that particularly influence the decisions of traders in the financial market in general and the cryptocurrency market in particular. Especially when they are about to execute an order. This includes the thoughts and emotions that a trader has or is experiencing. It can lead traders to make inaccurate decisions. Even impulsive and hasty decisions instead of following a rational strategy that they have set. Usually, these emotions are very complex. And investors have to spend a lot of effort and time to master it. The Importance of Emotional Control In the cryptocurrency market, there are always highly skilled traders who specialize in market analysis or possess extensive financial knowledge. However, not everyone can become a successful trader. They may have made a significant initial profit. But in the end, they have nothing left. Why is that? It's because they lack emotional management skills in trading. Emotions like greed, fear, and intense excitement after a trade with huge profits will affect their ability to make decisions on their next order. In general, not knowing how to manage emotions can "destroy" all the profits you have previously earned. Moreover, it can even cause your account to "burn". The reason for this is very simple. That is, you have made hasty and irrational decisions when angry, frustrated, or greedy. Therefore, to become a professional trader, you not only need to constantly improve your experience and skills, but also need to control your emotions. However, at present, there are many psychological factors that can affect the behavior and decisions of traders. And it is almost impossible to fully control all these dangerous emotions. Therefore, the best way in this case is probably that you need to know the emotions you have to go through. You need to learn how to get used to it and not let it control you. 5 Dangerous Emotions Traders Often Experience Below are 5 dangerous emotions that traders often encounter in the cryptocurrency market. Now, let's explore all of these emotions together! #1. Greed It can be firmly asserted that the primary purpose of traders when participating in the financial market is to make money. And they are particularly concerned about the profits they receive. This is a completely necessary goal. However, if this 'craving' quickly exceeds control and turns into greed, it will cause serious losses. For example, when the market moves in favor of traders, they refuse to take profits. Because they think that the transaction will always go in their favor. In fact, they even add orders and choose high leverage on their own. They want to quickly make a lot of profit with just one transaction. And when the market turns around, they can "lose both the bait and the hook". Or there are many traders who do not accept the fact that they have predicted the market trend incorrectly and are unwilling to cut losses. Instead, they always believe that they cannot fail. The price will soon return in the desired direction. As a result, their trades result in a very large loss compared to placing stop-loss orders to protect capital. None of these actions are based on price action analysis or the original trading strategy. This is simply impulsive behavior driven by greed to make a lot of money. And in many cases, traders can 'lose everything'. #2. Fear Fear is one of the worst enemies of traders. It tends to convince traders that they will make no profit no matter how great their trading strategy is. This is also the most common mistake of inexperienced traders. Because they have not yet mastered effective trading knowledge when prices have unfavorable fluctuations. This makes them become fearful and may automatically end the trade too early in losses. And it's a pity when the trade just ended, the price turned back in the right direction and reached the expected price. Usually, fear arises when a trader experiences a series of losses. Or after they have incurred a loss that is too large to emotionally bear. In addition, market volatility is also one of the most common catalysts for fear. To overcome your fear, make sure you have a well-defined trading strategy with clear rules. Also, determine a level of loss that you can accept before entering a trade. This will help you stay calm and "comfortable" when the market doesn't go the way you want. And then you can make the right decisions at that time: stop loss or wait. #3. Cay Cú Và Muốn "Trả Thù" This is the emotion that traders often experience when they suffer losses in a trade that they are "sure" will be successful. However, the important thing here is that there is nothing "certain" in trading. So when you have risked too much money in a trade. However, in the end, you lose all that money. Then it is highly likely that you will want to return to the market and quickly make a new trade to make up for the lost money. However, this usually only leads to another loss (and sometimes even larger) because you are trading based on emotions. #4. Excitement After traders win big or win a series of consecutive trades. They are often extremely excited and become very confident in the market. Although feeling excited is usually a good thing, it can actually cause a big problem. Because at this time, traders believe that they have fully grasped the market. They start trading with excitement and ignore potential risks. Unconsciously, they let emotions start to dominate themselves. And make emotional decisions that lead to regrettable losses. #5. Group Psychology Herd mentality or crowd psychology is the description of how the actions of a few traders are influenced by others. In other words, this is just the imitation of a group of traders, leading to actions and investment decisions being made en masse. Instead of relying on fundamental market analysis. For example, when a crowd collectively buys a type of asset. This will push the market price up. At this time, the market is at its peak: prices are rising too fast and too high. At this point, the psychology of traders begins to fluctuate. Please provide the text to be translated. They start trading without following any strategy or relying on any technical analysis. They will want to buy at any price despite the relatively high risk. And when the market plunges, the price forms a peak, a price collapse occurs and you will incur heavy losses. So be careful with the "crowd", not all the time the crowd is right. Only trade when you have fully understood the information and thoroughly analyzed the market. 6 Mistakes to Avoid Before Learning How to Control Your Emotions #1. Compare with other traders One of the common mistakes that traders tend to make is comparing themselves to other traders. In most cases, we often compare ourselves to successful traders who have more experience, knowledge, and skills. This creates the thought that you are operating less effectively. In reality, you may be trading much better than you think. This will make you lose confidence and become hesitant about trading decisions. You may miss out on good trading opportunities. #2. High transaction fees When traders start trading, they often execute many trades per day in the hope of making the highest possible profit. But they forget that high transaction fees can eat up a significant portion of your trading profit. So to earn more profit, choose a trading platform with low transaction fees and high liquidity. #3. Choose inappropriate trading assets Another common mistake that traders often make is choosing inappropriate trading assets. It could be assets that you are not very interested in and do not trade regularly. This will reduce your ability to analyze because you have too little information about it. #4. Do not research the market The fundamental reason why traders fail is the lack of market research. Most traders often “fantasize” about their own predictive abilities, especially when they have “won” too many times. They believe that their predictions are 100% accurate. However, with the volatile cryptocurrency market, all risks can occur. If traders do not carefully analyze the market situation, they may easily make wrong decisions. And there is a possibility of 'burning accounts'. #5. Do not use analytical charts It can be said that this is a very serious mistake when investing in cryptocurrencies. The perfect time for you to buy any coin is when the price shows signs of a breakthrough from a stable price platform. But how can you identify that breakthrough point? That is why traders need to know how to use analytical charts. The chart will provide you with an objective view of price points increase and decrease. From there, you can grasp the market trend and choose the most appropriate entry point. #6. Trading without stop loss One of the important skills that traders need to learn when participating in the cryptocurrency market is to become familiar with the ability to accept losses and move on to other goals. Set a stop loss order with the ability to accept maximum risk from the opening position. Instead of being dissatisfied with the loss and continuing to expand it with the mentality of "recovering what has been lost". This will burn your account immediately. 8 Ways To Control Emotions When Trading Below are 8 common ways to help you control your emotions in cryptocurrency trading. Let's follow along and find out. #1. Set personal rules It can be said that setting rules to follow when trading is one effective way to control your emotions. These rules may include setting acceptable loss/profit levels for you to enter and exit the market, identifying profit targets, and/or using stop-loss orders. #2. Trading under the right market conditions In addition, you should also stay away from unfavorable market conditions. Never trade when you feel uneasy. It could be times when the market is difficult to determine the trend or fluctuate strongly due to economic events, political instability, and unpredictability. In summary, for those times when you find it difficult to see market trends. Or at times of major financial events, news. If you cannot make your own judgment, then "skip". Don't follow others. Only trade in market conditions that you feel "comfortable". #3. Reduce trading volume One of the easiest ways to limit emotions affecting your trading decisions is to reduce the scale of your trades. You should remember that if you trade with a large scale, you can indeed make a lot of profit. So what about in case of a loss? You can also lose a lot! To make it easier to understand, let's try to imagine. Now you invest $10,000 in a coin. If the coin increases sharply, for example 10%, you will earn $1,000. But what if it suddenly drops by 10%? You will lose $1,000. You must be feeling very anxious? When you put too much money into a trade, you can't sit still if you don't know how it's going. At that point, you may easily lose your self-control and act impulsively. Therefore, trade with a moderate scale. A scale that you can accept and control. #4. Setting up Plans and Transaction Logs Planning before entering the market will give you a different and calm perspective on the market. You will not be affected by market fluctuations. In other words, your decisions will not be influenced by emotions. Furthermore, with a suitable trading plan, all actions are predetermined before entering the transaction. Therefore, you will not have to face making hasty decisions. All you need to do is "stick firmly" to the plan. Meanwhile, recording transaction logs will help you easily track your transaction history. From there, you can accumulate more experience as well as learn from your own mistakes. For example, in case you lose due to emotional trading, keeping a journal also helps you recognize your mistakes. After reviewing it, you will identify strengths and weaknesses in your method and strategy. And you will "adjust" and develop a better trading strategy for the next time. #5. Limit demo trading Indeed, a demo account is an extremely useful tool for learning trading techniques. Especially those traders who have little capital and are new to the market. It's completely free. Moreover, you are not under any pressure if the trade loses. Over time, however, this makes you not feel the future psychological pitfalls you'll encounter. In addition, it makes you very easy on yourself. Even lose discipline in trading. You will trade emotionally instead of following the plan you made. In addition, a demo account is a type of account that uses virtual money to trade in the real market with "perfect" conditions. This means you will not know (or rarely see) the issues that real traders often encounter. Such as slippage. And in such cases, you will not know what to do and easily let emotions dominate. #6. Set reasonable expectations This is a commonly used method often applied in parallel with setting up a trading plan. Especially for new traders after their first successful trade. They often have a mentality of wanting to get rich quick and expect huge monthly profits. However, expecting a fixed profit percentage every day, every week, and even multiplying the account several times a month is unreasonable. This leads to increasing the risk of the account. Instead, profit rate expectations should be set annually. Even the best-performing hedge funds in the world only achieve an average annual profit of 25 to 40%. This is equivalent to 2 to 3% per month. So set a reasonable long-term profit target and improve the annual experience ratio. As a side note, these expectations will often be directly linked to the risk-to-reward ratio. How much risk are you willing to take? How much capital can you put up? Answering such answers will somewhat help you confirm your potential profits! And only when you identify the potential profit you desire, can you focus 100% on planning to achieve it. At this point, you will not be swayed by any emotions anymore. Therefore, this will help you earn even more profit. Isn't that great! #7. Stop trading when there is a series of consecutive losing orders The cryptocurrency market is always volatile and we cannot always accurately determine the trend 100%. At some point, in unfavorable market conditions, you may have a string of consecutive losing orders. At this time, your mindset will be restless. You start doubting your trading strategy. This is also when your trading psychology gradually loses control. You will do everything possible to "save the situation". And typically, you will want to place an order immediately to recover losses. Even when market conditions are not really ideal for trading. You may even increase trading volume several times to quickly recover what has been lost. However, there is a high probability that this will cause you to lose more, sometimes even white. Because you've lost your temper. You trade emotionally. So if your total losing orders cause a 20 to 30% account loss, you should pause trading. Then review and analyze the history of losing trades to draw lessons and experiences. Thereby improving the trading strategy. You can also trade with a demo account to "battle" with a new strategy. As well as regain the feeling of winning. Only when you are more comfortable and confident should you start trading again. #8. Limit trading when there is a series of consecutive winning orders This is a very happy thing! However, this can have a negative impact on your trading activities. Because a series of consecutive wins will make you feel complacent and self-satisfied about your own level. And then, you let emotions dominate yourself. For example, you may increase the trading volume in the next orders, and expect to win bigger this time than the last time. But things may not turn out as you expect. And then, you suffer a big loss. A loss can wipe out all the profits you have earned. That's why when you have a streak of consecutive winning trades, you need to be even more cautious in the next trades. Both in terms of trading conditions and the volume entered into the order. Surely with that series of consecutive winning orders, you have made a significant profit. It can even go beyond the monthly profit target you set. So, now is the right time for you to reduce your trading volume. Because if you keep winning, that would be really awesome. But if you lose, it's just a small setback compared to the profit you're making. The important thing here is never to let your emotions and feelings become excessively excited after winning orders. Remember that overconfidence will make you subjective, and that is extremely taboo. DYOR! #Write2Earn #Write&Earn $BTC {spot}(BTCUSDT)