It's really annoying when you start seeing your portfolio increase in value, begin to get excited, then boom! It all plummets. The entire market goes down together.
If you have cash on the sidelines, and faith in the industry, you of course use that as a buying opportunity. But not always do you have cash on the sidelines that you can reasonably allocate to yet more crypto. One does need to tend to a little thing called asset allocations and diversification.
And even if you can take advantage of the dips to swing trade (buy more than you intend to hold, with the intention of selling it sooner than you sell your hodl stack) I think one still laments simply seeing the drops, however temporary. It's just an emotional roller-coaster no one really wants to be on.
And most importantly, it causes bad decision making!
Thankfully, there is a remedy.
Equanimity in Trading
In life in general, we benefit from developing a baseline of equanimity. Baseline in that though we can't remain static there, we have a tendency to return to it when overwhelming stimulus is removed. It's how we feel most of the time, regardless of what's happening. But what is equanimity?
In some Eastern traditions it is thought of as the absence of attachment or aversion. You aren't addicted to anything, or even grasping at anything. And you also aren't avoiding or fighting off anything. There is mental and emotional peace within acceptance of the present moment, whatever it contains.
The benefits of equanimity are many, but the most important one to me is simply that we can face situations more effectively and create better outcomes if we aren't being pulled back and forth by wild emotions. When we are calm and clear headed it feels better immediately and also leads to better outcomes later.
In crypto trading that looks like making sound decisions, rather than chasing gains others have had.
No FOMO. No FUD.
No grasping, due to Fear of Missing Out.
No avoidance, due to Fear, Uncertainty and Doubt.
Whatever you use to decide your trades most successfully, whether that is momentum trading charts, value investing for longterm that ignores price at time of purchase, or whatever, you simply use it consistently. That's the key: consistency!
Sounds like a great idea, right? But it's impossible to be consistent if one's emotions are riding the waves of a super volatile market filled with screaming monkeys, shilling their bags and lamenting their wipeouts.
We have to get off that rollercoaster all together. Equanimity is where you seat yourself instead.
How to Equanimity?
I just used the word with inappropriate English language syntax quite deliberately. Though Equanimity is a noun, I think that's the wrong way of understanding it. When you think of it as a noun, it sounds like some solid thing that exists. It is created and then there it is to retrieve whenever needed.
I think a more accurate understanding is that equanimity is a verb. It is an action, not a thing or state.
Equanimity if fluid. It is moving, but unmoved.
It is like a great ocean that can contain much, yet still be the ocean.
It is not identified with this state or that state, or this identity or that identity. Because it is not identified with limited concepts, it is unlimited and untouchable. That is its strength.
If you knew you couldn't lose, wouldn't that make it easier to stay the course on what you're already doing?
It's fearing you've done something wrong that puts one off balance, making hasty decisions. We fear we have not made a trade we needed to make (that someone else made and therefore had all their financial problems instantly solved) or that we made a trade we shouldn't have that we now need to rush out of before losses get any larger.
With confidence, we can be more stable in how we relate to trading. Equanimity is the foundation of that confidence. But not a brittle foundation. That doesn't work with human emotions, because we are naturally fluid beings. Pretending otherwise is why so many people falter.
I argue that any plan that does not take into account just how fluid your emotions are, is a plan doomed from the start. But with equanimity, that emotional flux doesn't have to mean investing chaos.
Developing Equanimity
If you want to up your equanimity game, the single best thing you can do is to meditate.
The metaphor often used for meditation is a great blue sky with clouds floating through. You identify with the sky, not the clouds. The clouds are thoughts and emotions that simply pass through the sky, but they don't change the sky, only what is momentarily perceived there.
In the same way, your mind is untouched and unmoved by the emotions and thoughts that pass through. Sure, some are attractive and some unpleasant. Regardless, the mind simply observes them without indulging the need to hold onto them or push them away.
It is here. It is not here. Something else is here now. Then it is gone too. We simply watch.
This practice is a sort of mental and nervous system training. You train yourself to be non-reactive to thoughts and even to emotions.
It's not a dulling, like taking a depressant. Instead you become more resilient by increasing your clarity. You are more aware of what is there, not less so. You are alert and yet somehow also relaxed.
That combination of alert peace is the key characteristic of having developed equanimity skills. The more you do so, the better your trading will be, in terms of both experience and results.
And the better your entire life will be!
How to Meditate
I actually created a website called learntomeditate.crypto a while back when I was experimenting with Unstoppable Domains. So if you're new to meditation and want simple, easy to follow instructions, that will be sufficient.
As with investing, in meditation the key is consistency. Don't look for the "best" meditation technique. Choose any technique you can understand how to do, then just do it consistently.
Some people find their bodies are too agitated to possibly sit in meditation. I was once that person!
During that phase of my life I found that meditative dance, for me Ecstatic Dance in the 5 Rhythms style, was the pathway I could access. It took me from really active energy of dancing into chaos (thrash, shake, jump, stomp, thrash some more) and through that back into stillness (the body moves, but I'm watching not causing that movement) to reach a place where I could watch thoughts and emotions pass through my awareness without getting lost in them.
Now I can easily sit for meditation where that is all I'm doing without needing a process to get there. It's only because I started where I was back then that I'm able to be here now. So my advice would be to just be practical about the thing. Don't rush forward in your pursuit of equanimity!
If you can sit, sit. If you can't sit, do movement meditation practices like ecstatic dance, yoga, or even just walking with full attention to each step.
Above all, enjoy your practice of meditation and your practice of investing. This really is supposed to be fun.
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