Consistently traders are liquidated out of the market, a factor that has discouraged many from consistently
trading the market. However, traders in the crypto sectors are greeted daily with so much demand and
supply to speculate a good position for confirmatory entry. But market volatility has created a bearish
swing for their portfolio.
Or speculation that affects their trading position, which significantly might not be true 100% but
might be caused by a lack of understanding of market psychology. Some investors are liquidated
out of the market because they don't trade according to market psychology.
The psychology of the market is determined by the financial institution, they regularly
regulate the market to liquidate vulnerable traders who emptily traded without speculating
alongside the financial methods of commanding the market.
It's very important as a trader to understand the trading psychology while trading, speculating is not the end.
In this article, I will be doing an expository explanation of trading psychology as a trader who wants to create
a balance in the crypto ecosystem.
Trading psychology
Trading psychology implies the components of investors' decision-making process.
At this point, it's not limited to investors' decisions alone, it's about understanding the financial
institution's psychology and making decisions around it. But here it's the reaction of traders or investors to
trade or trading, the will reflect during trade or after trading. Below are the various trading psychology explained.
Don't FOMO, buy the dip
One of the psychological tactics financial institutions use against investors is to dip the market.
However, investors who don't understand the trading psychology of seeing the market dip will move out.
FOMO means fear of missing out, some investors ignorantly neglect or ignore the dip thinking that if
they enter the market it might liquidate their portfolio. This is wrong, seeing market dipping is an avenue
to enter the market. The dip is the best time to buy, the psychology gets more interesting when you enter
the market from the sell side. It gives you more ROI.
Instead of missing out because you observe the market is a dip, buy from the dip and watch your portfolio grow.
Never panic sell
Another trading psychology every investor should know is never to sell your holdings out of panic.
This regularly occurs when investors see that the market is bearing. The bear market seems to be like
a nightmare to many investors, the moment they see a bear market they sell their holdings.
You should understand that when the market dips it's not the best time to sell it's a very good ground to buy
more holdings or be patient for the market to grow more.
Don't be a pig in the bull and bear market.
There is always a struggle between buyers and sellers and those who fail to align with the market tend to
be the pig. As a trader what you should never allow is to be the scapegoat in the fight. So many always fall
victim to the tussle between the buy and sell. Keep the market from going against you, so you miss out on the
trade. The bull and bear markets always want to win. Join the sell or bull side in trading, don't allow the
market to go against you.
Avoid fake news
There is news that will always make investors make the wrong move, definitely, coin creators always
want to sell their project, what you should avoid is fake news. Scrutinize every news before you invest in anycoin.
Fake news can liquidate your investment. Pay attention to credible news.
Always remember to set your stop loss
Stop loss saves you from liquidity, one of the trading psychology financial institutions uses against
traders is the liquidity factor. They tend to liquidate the market to kick some investors off the market.
So to play around with this liquidity, you must know how to set your stop loss to avoid being a pig.
Stop loss is a risk management strategy that helps you sustain your fund to trade more.
You can learn more from here.
Avoid newly listed tokens.
Investors always want to take advantage of newly listed tokens because of the profit they tend to gain.
Newly listed tokens might be volatile, this might be a liquidity trap to liquidate investors' funds.
When you see newly listed tokens don't trade them unless you know they are sustainable.
Furthermore, some newly listed coins are pump-and-dump coins,
they are meant to bring investors to the market and dump them. Be careful of the newly listed coin.
Revenge trade is like taking back from the market what the market takes from you.
These tactics might not be cool. Don't invade the market because you want to recover your loss.
If you do this you might not be conscious of the risk attached to the trade.
Set realistic goals
Trade with goals in perspective, don't just speculate trade in a vacuum, know what you want from each trade,
set your profit goals, trading goals the number of trades you will take daily,
and what you plan to achieve from the trade.
Always celebrate your small wins.
Many traders always see themselves as not doing enough despite the profit they are making.
This might affect your trading sense. Try and celebrate your little win it gives you the avenue to
come up with more strategies to trade. Don't be limited with the mindset that you are not doing enough.
At every point you get ROI celebrate it.
Risk management
Risk management is setting parameters that will save you from liquidating your funds.
Why trading you should consider trading with risk management in perspective.
The financial institution regularly dips the market to kick vulnerable investors out of the market.
To avoid being vulnerable to must consider taking advantage of risk management.
As an investor, having trading psychology helps your trading skills effectively,
it helps understand how the financial market swings the market in their favor.
If you must speculate on the market, you do your speculation from the perspective of the financial institutions,
which in return gives you ROI advantage.
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