When I used to trade frequently, I learned to become familiar with the feeling of not breathing. I would invariably have a trade go against me and this impulse would appear, almost as if on cue.
Human beings are wired this way. Our monkey ancestors lived in jungles where predators hid behind every bush or rock and we had to constantly be on guard.
Despite the fact that we’ve evolved as a species, this mechanism persists. What’s worse, making decisions in this state of panic can lead to some of the worst decision-making possible.
What to do
The hardest part of cryptocurrency investing isn’t picking a currency and watching it go up 10,000%. It’s buying a currency and watching it go down 40% before they end up going 20% from your original price. It’s waiting.
Psychology is at least 80% of the game. I don’t need to go over the statistics. Most people sell at the bottom and buy at the high. As I’m writing this, bitcoin and ethereum are fresh off of all-time highs. If as you’re reading this bitcoin and ethereum are still at all-time highs, do not buy! Be patient, wait for the price to come down and then buy.
In early November, bitcoin crashed by more than 30% virtually overnight. This sort of “crash” happens frequently with cryptocurrency. How frequently? At least once a quarter.
In this market in particular, it is important to maintain a long-term focus and ignore short-term volatility.In fact, if you’re already invested in cryptocurrency, you may want to resist the urge to follow the news altogether.
New to the game
If you’re new to this topic or have not yet invested in digital currencies, use this volatility to your advantage to buy the dips.
Once you’ve bought, take a deep breath, close your laptop, go outside, go for a walk, meet someone new.
Cryptocurrencies are future of currencies and fit the trends in every industry. Investing requires patience and discipline. You should know yourself very well and if you are compulsive person, it is going to be very difficult for you to make money.