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The cryptocurrency markets can make a trader feel like a genius one day and like a complete idiot the next day. These trends have a way of covering mistakes and bad habits. When there are strong and persistent trends, it will eventually cultivate habits that will encourage trading behavior that can at a point in time prove costly to traders.
For instance, at a point it time, it will look like the price of the cryptocurrencies are mixed due to volatility and it would appear as if the market would recover quickly, but it will turn out the price is never improving for a couple of years. Similarly, there can be other instances where the price is rallying for no reason at all. In some cases, the dominance of an asset type will go up and in other cases the dominance will go tumbling down all of a sudden.
In cryptocurrency markets, the trades and outcomes due to emotional swings are inevitable. The emotional thrill of a highly profitable day can encourage risk taking eventually leading to costly trades. Many times the correct move is to not make a move at all.
In the practice of risk management, when something works and keeps working, people stick on to it. However, many times it so happens that just because it happened before it doesn’t mean that it will happen again.
There is nothing called an easy trading strategy. Most of them think that they are a genius and they honestly believe they are the best until they lose 80%.
Hopium influences traders and they feel that betting big “this MUST” and at a point they dare to the extent of betting the farm.
It becomes important to practice patience, slow down, make bets, which are managed for risks and to deal with collecting small percentage wins which accumulate over time.
Many times, enduring good betting practices will go bad in trading. Trading is always risky and many times traders mistake luck for skill.
The dream of becoming rich has driven people crazy. The person who will go crazy will not hear the truth. For many traders, the sound of a lie is very pleasant. There seems to be no gain with emotions, but with mathematics and experience. The trend is a friend until it ends.
In reality, money making in trading is very easy, keeping the money is the hardest part. Traders land up holding trades they should cut and cutting trades they should hold.
