Hello guys! I have been trading altcoin as a hobby for a couple of years now. Recently, I have decided to go "pro" and invest lots more time and money into altcoin trading. I have noticed throughout the years the "fear vs greed" within the cryptocurrency market. You can see this emotional trading pattern in regular stocks as well, but regular stocks are also backed by hard goods, whereas the crypto market is backed by promises, websites, ideas, and developers (and some basement dwellers too). Therefore, the crypto market is HIGHLY leveraged by emotions.
I am a female (look ma, a real girl!), and being a woman, my emotions tend to run higher than a man, which is why the stock market and cryptocurrency market is inherently dominated by men. This is a double-edged sword, as i have been working diligently on keeping my emotions low and financial intelligence high while trading. Trading can be very emotional when you lose your ass, or you watch a coin that you were going to invest in skyrocket to 70% overnight (just happened to me, ugh!) So, kicking oneself in the pants is a hard habit to break.
So how does one leverage their emotions and the emotions of other traders to make a profit and keep your sanity in the altcoin market? Here are some ideas I collected that may help you and I succeed without losing our minds!
1. Do not fear the fluctuating graph
This is a hard one to overcome! Instead of cringing and applauding every movement of the graph on a coin you invested in, take the time to analyze and study the movements for an edge on predicting futures.
2. Buy in FUD, sell in FOMO
The weak sell in periods of FUD, and also buy in periods of FOMO, therefore always missing the ball on profit. When others are being FUDsters, buy, buy, buy! Now, this is not always the case if there is actually truth to the FUD. However, from what I have witnessed, 90% of FUD originates from the bandwagon mentality.
3. Look at margins, not prices
Constantly looking at the price can make you miss out on good entry and exit points. However, looking for overbought and/or oversold conditions paints a far better picture. Lots of technical strategy graphs are available on tradingview.com.
4. Set stop loss prices and alerts for sale prices
Setting a stop loss will help you sleep better at night, and an alert for when your coin is reaching its fruition helps to not constantly look at the charts.
5. STOP looking at the charts every 5 minutes!
Okay, so I am terrible about this one! I can get in such a bad habit of constantly checking the chart. I usually have the chart open on another browser tab, and it will tell me the price on the actual tab, so I cannot get away from it! Set your alerts and stop losses and put the screen down, my friend!
Do you have any useful ideas to help reduce your emotional reactions while trading altcoin? I would love to hear about it!