Trading in cryptocurrency can get quite emotional. Continuous upswings and downswings in the market are, oftentimes, an uncanny representation of your mood as you cope with rapid price fluctuations. While it’s important to learn how to maximise profits in your crypto-trading journey, it’s also crucial to maintain a healthy state of mind.
Here, we’ll discuss some healthy mindsets and practices you should always have when you’re trading in the ever-fluctuating cryptocurrency market.
Keep calm and HODL
It’s easier said than done, especially when Bitcoin (BTC) was so close to the USD 12k mark just a while ago. Instead of panicking with your investment and selling it away in a mad rush, take a step back and hodl.
In one of our articles, we talked about the differences between investing and trading. Traders often make many transactions in a short period of time, while investors tend to hold their assets. Making multiple transactions a day puts you on edge, which pushes you to make rash decisions. Despite rapid changes in the crypto market, always remember that what goes down will always come up. So keep calm and hodl.
Make decisions based on your research
When trading crypto, it’s always important to make buying and selling decisions based on informed research. As difficult as it may be, never buy or sell any of your crypto assets based on your emotions alone. Joining a crypto trading community, discussion forum or telegram group will definitely be helpful. Bouncing ideas, asking questions and clarifying with different individuals can pull you away from making rash, emotional decisions, and possibly avoid losing more money.
Don’t buy coins just because of #FOMO
Just because an influencer is rambling about an up-and-coming coin, doesn’t mean that it’s a credible crypto asset to invest in. Many of these “influencers” are simply commissioned to promote an unprofitable crypto product. Additionally, some Facebook pages or websites which make big promises about their new crypto products are potential scams designed to prey on uninformed individuals who simply want in on making money quickly.
Having a FOMO mindset is NOT how you want to get into trading cryptocurrency. Being informed, rational, and calm is the way to go.
Don’t go all in
Since cryptocurrency is susceptible to fluctuations, playing safe is a better strategy to keep yourself from becoming overly emotional when you see losses. One way to go about it into keeping a stash of, say, Bitcoin (BTC) in your hardware wallet, determine an amount you are willing to lose and trade with it. Playing safe and practising prudence will benefit you in the long run.
While it’s true that trading and investing in crypto is largely speculative at the moment, it’s vital to avoid going in with a mindset akin to gambling. Being informed about the market helps you make rational decisions. At the same time, being strategic about your transactions can help you earn profits. Joining a crypto community with genuine members who want to help each other succeed also plays a part! If you’re interested, you can be a part of our community here.