Trade With Data, Not Emotions!
If one thing traders have a consensus on — you cannot keep emotions out of the trading game. It’s a built-in feature that drives the major ups and downs of the market.
Does this sound familiar –
● This trade looked so good. How did I lose this one?
● This is going to turn around. Let’s widen that stop-loss order. It’s too good to fail. — And then it does.
● I have a feeling this coin will moon! (Turns out to be another fail)
If any of such scenarios have happened with you lately, and it’s not infrequent. It might be time to have a good look into what’s really driving your decision-making.
Emotional trading is largely driven by fear & greed. It’s what you see when people buy at the market top & sell when there’s a huge dip.
Trading Out of Fear
When your trades are based on Fear, you are very conscious of the risk. But then again, you are too conscious, making you miss some real jackpot trades.
Fear makes you close trades before they can pick up. And managing that emotion can be tough because it is most likely a compensator for your lack of confidence or the inability to manage risk.
Trading Out of Greed
Greed has likely set in when you are not taking profits, even when the trade has crossed your pre-decided profit level.
Although you end up making money on some trades, more often than not, you lose profits because you waited too long. It’s a foolproof way to burn a solid trading system to ashes.
Greed makes you underestimate the risks associated.
Another behavior is when you find yourself entering into trades too early just because you don’t want to miss out on a trade.
There is another kind of Fear which is prominent among traders. But it is driven by greed.
It’s Fear of Missing Out (FOMO)
Signs You Are A FOMO Trader
● You rush into trades without doing due diligence.
● Whenever you see an opportunity, your self-defined rules are the first to go out the window.
● You trade aggressively, more than you should.
● You make trades based on what others are promoting on social media.
● You have no strategy on your trades- Spray and pray
● You follow the crowd after the big move already happened
You cannot keep fear & greed completely out of the game, these emotions are natural and quite common in trading. The trick is recognizing these emotions when they are at their highest which in turn drive you to make trading decisions. Unless you are experienced, you can’t completely eradicate or suppress those emotions when trading. You could try taking yourself out of the ring with a trading assistant which can supplement your trading and make trades for you. There are tools available to traders which can provide control and automation over your trading strategies.
Trading Only on Data: A Better Way Out?
Experienced traders know better to trust data over their emotions. They do their homework every time before entering a trade. They use past data, a coin’s history, and market indicators to justify a call. And with years of experience, they collect enough wisdom to battle their emotions and not give in to them.
The financial legend Warren Buffet once quoted,” If you can’t control your emotions, you can’t control your money.”
If you’ve just started your trading journey, it is strongly advised to learn how to use data and how to base your trades when the data tells you to.
Trading only on data gives you an edge as:
● You won’t be making any rash decisions.
● The probability of the trades working would be much higher as you’ve eliminated the emotion out of the decision-making process.
● All your trades will be backed by reliable information and data, making them less susceptible to unnecessary losses.
● Even your losses will be calculated. Backing on data, even if you lose a trade, you will only lose what you can afford to.
A Modern Solution to Trade Only on Data
When you are starting out, learning how to read the financials, study the data & perform technical analysis — the optimistic novice brain tries to take over. Looking for opportunities to make that big buck and at the same time wondering if the trade they just let go of was really a bad one.
This can be frustrating, not just for beginners, but even the most seasoned traders. The worse days you have, the more prone you become to giving into your emotions.
A brilliant way to ensure you are covered is to add an AI trading platform to your toolbox that acts like your trading assistant.
An automated trading assistant is a system designed to increase your trading efficiency through the faster execution of API calls to your liquidity provider.
A state-of-the-art AI trading assistant like CurPay eliminates any error you may make because of emotions catching up. You remove the ‘what if’ factor from your trading strategy once and for all, taking all emotion out of it.
Moreover, with a modernistic automated trading assistant like CurPay you can even determine your risks by testing your theories on historical data within seconds. When you establish a new trading pair, you will feel more in control. Also, you will become a better trader by following the AI trades and understanding the reasons why it traded.
Having an automated assistant while trading is truly a modern bliss. You can never go wrong with having an AI buddy helping you up your trading game. Think of it like Tesla’s autopilot feature. Tesla’s Autopilot can get you to your destination safely.