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  • Bitcoin Trading: 7 Tips to Detach your Emotions from the Trade

    If you have to navigate the fluctuations of the market, you must actively monitor your portfolio. At the same time, as an investor, you need to manage your own behavioral impulses to buy and sell assets when the market goes up or down. So, how can you navigate market volatility and maintain a diversified portfolio which can give you the best returns? The best way to do this is to understand what the motivations are for emotional investing and avoiding the depressive and euphoric investment traps which trigger faulty decision-making.

    How to keep your emotions aside when trading cryptos:

    Crypto trading can be both interesting and profitable. However, it can also be characterized by FUD and FOMO that forces decisions based on emotions rather than real facts. So, to avoid losing a lot of money and mitigate risks, you must keep a tab on your emotions. You will see that crypto traders often end up with losses because of common mistakes like impulsive trading, skipping trades, revenge trading, chasing the market, etc.

    • To begin with, you need to understand that fear and greed controls the trader more than any other emotion. Fear results when you trade in big volumes and this amplifies effects of a bad decision. Fear also happens when you trade without conviction; you know the trade is wrong but you cannot get out of it. As a trader, you must have some greed in order to trade. But the downside is that it often leads you to chase the crypto market or make bad trades.
    • You must have a proper trading plan in place to keep emotions at bay when trading. In this technologically advanced environment, cryptocurrency offers financial freedom to individuals who may have limited access to traditional financial systems or who are looking for an alternative to the traditional banking system. According to Neue Kryptowärungen, many new cryptocurrencies have come into the market with a high potential for profit in the future. This means highlighting your trading goals to see how these fit in best with your overall finances, whether you have savings from other sources, whether you should make safer investments than cryptos, etc. You need to figure out how much money you can afford to lose through your crypto investments and whether you can handle the volatility which the market offers.
    • Research the coin’s whitepaper before investing in any digital asset. It is important to pick out cryptos founded on strong technologies and backed by an active community. Entering into not-so-great trades will yield not-so-great results. You need to identify the best trading opportunities, even if it means trading less.
    • You must not obsess over trade charts because the crypto market is always marked by dramatic price swings. It is this volatility which draws investors to cryptos. But the volatility is really an emotional rollercoaster, making you react strongly to market crashes and surges. You will end up engaging in panic buying and selling because of FOMO.
    • You should look at crypto trading like a business; so make a plan and stick to it. Maintain a journal to record your past mistakes. Keep rules for taking out profits to pay for your expenses and set achievable targets. Side by side, you should continue watching the market, staying updated with financial news, etc to keep emotions away.
    • You need to trade using the right size; if you trade with a lot, you automatically become fearful and nervous. So, it is best to start off with small trades and then scale up the portfolio as you gain experience and become familiar with the market’s nuances. To maximize potential returns, it is also crucial to select cryptocurrencies with high growth potential. Investors can leverage cryptocurrency presales offered by Insidebitcoins to buy coins at low prices and to get high returns.
    • Finally, you need to have a life beyond the trading world. This means spending quality time with loved ones, going on vacations, working out, and eating well. If you trade round-the-clock, it will lead to faulty decisions.