The Capital
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The Capital

How to deal with fear in trading?

By Your Crypto Boss on The Capital

As we have already found out before, the reasons for the trader’s financial losses are 90% in his brain. Emotions make the trader to sell for cheap, to buy expensive, to miss the profit and to become a victim of informational manipulations. I have already written about the harmfulness of emotions and how to fight with them. Today we are going to talk about fear — the worst enemy of a trader.

The main fear types in trading are the following:

1. The fear to start trading with real money

A person can read books on technical analysis for years, be subscribed to all financial news and trading on a demo account. He/she may find it interesting to talk about the market or where the price will go. But he/she doesn’t persist in trading with real money, finding a lot of excuses for that (he/she has to read more about the theory, he/she has to accumulate money, he/she has to wait for the crisis to pass (!)).

In fact, the person is just afraid to start trading. If you have recognized yourself in the description, answer yourself the questions:

Do you really need to trade? In order to make money on the crypto, you just have to buy Bitcoin and to figure out how to store it safely. The rest of the market will do without your participation.

If the decision to trade is unshakeable, think about what exactly are you afraid of? And logically disprove those fears.

Are you afraid of losing money? But if you have studied enough information about trading, practiced on a demo account, and have a plan of action for any development — what are you afraid of? Loss in a deal is not terrible if the strategy itself is profitable. The lost battle — is not a lost war; a loss on a trade- is an episode, that, with the right approach, will soon be overlapped by a series of profitable deals.

Do you think that by trading on a demo, you pump up your skills, and then, in some distant future, you will start to trade successfully on the real at the very beginning?

Unfortunately, that’s not true.

If you want to be successful with women, but are having sex with a doll from a sex shop, you won’t advance towards your goal, because the doll never refuses you :)

Trading on a demo account, you won’t become a successful trader, as on a demo account you don’t have to fight with emotions, and this is almost the main thing in trading. May the ladies forgive me for such comparisons.

2. Fear of action

The price matches your limit order, and you push it back or you remove it — “what if it goes further and I’m not at the bottom?”

The price goes against you, you have to stop or close the position, and you have a blockage. There are no other ideas besides the idea that “it’s time to get split up.” You see a good opportunity to enter, but doubt prevents you from using it.

The price of Bitcoin has dropped to 9400 and you’re selling it. Although it’ s been up a few times before, but it’ s still scary — what if we go to 7500?
Do you recognize yourself?

Answer yourself the questions — do you have a plan for any developments after the transaction opening? Let’s go in the right direction — everything is clear here, the only question is profit-taking. But what happens if we go by 100 points in the wrong direction? And what if we go by 1000 points? Evaluate not the probability of this event, but what will you do if it happens? If there is no plan, the fears are justified, don’t act, first the plan. Understanding what you’ll do if Bitcoin drops below 8,500 will keep you from selling it at 9,400.

3. Fear of inaction

You are always watching the market and your account on the monitor/phone. It seems to you that if you do not do this, the whales and market makers will lead the market to your liquidation price, or at least knock down the stops. Or there will be opportunities in the market that will be passed by you. You’re staying at the monitor 24 hours a day, can’t do anything else, in worst cases comes to the problems in your personal life.

Do you recognise yourself?

Answer yourself the question — does your presence/absence on the monitor affect whale and market maker plans? Can you prevent these plans from happening? The answers are obvious here.

What should you do to be ready to work on any market movement without you being present?

The answer is obvious here too — limit orders. You can buy back the drops and fix profits with them. And there is no need to sit at the monitor.

It’s better to ask questions and to give answers to them in the trader’s diary.

It’s clear and will save from recurrences of fear in the future.

Please don’t forget to follow us on Telegram and stay updated!

YOUR CRYPTO BOSS

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Your Crypto Boss

Your Crypto Boss

NFTs, MARKET ANALYSIS AND LIVE TRADING. -How to work with the crypto market and always to be in profit? Sign up! https://t.me/joinchat/AAAAAFMbyGGswSBHW8327Q