Crypto trading necessitates a lot of thought. It is worth noting that we employ the word thinking here, which people most often regarded as the polar opposite of feeling. Yes, you would want to think more and feel less in trading. Let us have a little philosophy class in this article. Specifically, we will talk about the philosophy many traders use, stoicism.
Stoicism explains that, while we may not always have control over the events that influence us, we do have power over how we handle them, according to TED-Ed. Stoic is an adjective we use to describe persons who are emotionless.
And keep in mind that feeling less or more is not always a bad thing. It depends on the circumstances. We only need to learn when to use these emotional levels. Most of the time, the former is more advantageous, especially if you are in a situation that requires a lot of thinking.
Analogy 1 ─ The Stormy Waters of Crypto
The market is the one aspect of trading we have no influence over. To better grasp this, let us use an analogy. The crypto market is like a sea that swells and swells, unconcerned about how you feel. When the asset you purchased works in your favor and rises in value, you must be overjoyed. To navigate the stormy waters of the crypto market like a pro, ensure you use a sturdy vessel in the form of a trusted trading platform like Bitcoin-loophole.io.
On the other hand, fear envelops you as the market trend does not favor you, pulling down the value of your money. The market has nothing to do with how you feel. Your feelings are only within you. And the market is unaware that you exist.
The market does not wish to cause you any harm. However, there is nothing you can do about it. You have no control over anything except yourself. As a result, you must let go of your emotions and concentrate on your game plan.
A sailor can only manage himself, not the sea. He can study weather patterns and other approaches to become a skilled sailor and gain expertise. He knows when he wants to go to the beach and the sea. The excellent sailor employs his intellect. The sea is beneficial since it allows you to consume various fish. It is also a way to get to other islands.
On the other hand, the sea is quite dangerous; you can drown in it. You can get what you desire if you approach the sea with logic. However, if you allow your emotions to control you, you will be unable to focus on the reality of the water.
Can you see where I’m headed with this analogy now? A trader must study market trends and reversals like a sailor studies the weather and waves at sea. He should begin with a tiny account while learning how to manage it. You do not influence the market; you only have power over yourself.
When a novice trader wins several trades, he begins to believe he is a professional. However, this type of trader is prone to making risky trades until his account depletes. A BBC report describes a circumstance that is identical to this one.
On the other hand, a novice who has lost a series of transactions will eventually lose confidence and will be unable to make an order. Despite the alert from the system he’s using, which says he should purchase or sell crypto immediately. You cannot use your brain correctly if you’re experiencing too much excitement and terror.
When you are overjoyed, you will make foolish decisions and lose money. At the same time, you will lose out on profitable trades when fear takes over you. When a sailor is disturbed by a strong wind, he will only adjust his sail.
This is also the trading option if you’ve been overly affected by the market. Trade with a smaller account size simply. When you’re learning the market or if you’re feeling pressured, start small.
Professional traders maintain a constant sense of serenity. Remember that emotional trading is an unnecessary luxury that no one can afford. You cannot let your feelings take precedence over your thinking.
The majority of individuals enjoy thrills and amusement. And the market is one of the most fun locations on the planet. However, trading based on such emotion is dangerous.
Analogy 2 ─ Gambling
The sensations achieved through emotional trading are similar to those experienced by gamblers who bet on race tracks, horse races, and jockeys, among other things. As they win, their joy is contagious. People are arguing, hugging, and shouting at each other.
When they lose, on the other hand, they cry, sigh, and become depressed. A trader gets to experience all of this. And it is for this reason that trading is so challenging. One must manage emotions in trading. It is simple to say but hard to do.
Do you know why Casinos provide free alcohol to their gambler customers? Because they become more emotional and inclined to wager more when intoxicated.
The ideal question after knowing the notion is, how do we transcend our emotions? First and foremost, it requires time; it is not simple, and we must approach it gradually. One alternative, as previously noted, is to reduce the account size. You can’t carry it because it’s too heavy for you.
Analogy 3 ─ Working Out
If you’re new to working out, you won’t start with the heaviest barbell or dumbbell, just like you wouldn’t start with the heaviest barbell or dumbbell in the gym. You’ll begin with the simplest. You will become accustomed to it and progressively acquire weight as time passes.
Trading is the same way. You begin tiny. And as time passes, you get the hang of it and become large. You won’t be able to speed up the process. Many traders fail because they give up before becoming profitable.
The fear of investing in crypto is normal. It is not an odd feeling. Several studies show that it happens because crypto is counterintuitive for us people. We are just starting to get used to it.