It wouldn’t be wrong to relate cryptocurrency trading with a battle arena – rife with clashing sentiments of nervousness, mind games, pressure, and excitement of involved parties. With money at the center, the unpredictable crypto space can certainly flip the sanity of anyone. Moreover, contrary to the stock market, it is a 24/7 open market causing many traders (with money at stake) to experience a constant stressful state. They keep checking the price graphs, think about the possible price moves all the time, and frequently regret missed opportunities.
Now, the question arises how to protect your sanity while trading crypto? It is of utmost importance to be mentally comfortable while trading if you want to make rational decisions and attain potential returns. There is no doubt that a healthy and confident mindset is the hallmark of all leading traders. So, here are a few tips regarding how you can control your nerves and stay stable while trading crypto.
1. Stick to the plan
Trading without a plan or acting on your “hunches” is one of the worst things you can do as a crypto trader. To proficiently counter every sort of situation, you must devise your strategy or plan before entering a trade position. For instance, you should be clear about why you are making a trade here. What are the realistically possible scenarios and what to do under each one of them?
Also, sticking to your devised plan is as important as chalking out a plan. No matter how detailed or optimal a plan of action is, it is no better than junk if not “acted” upon. It is not uncommon to see traders who keep changing their decisions with every price swing. However, such erratic behavior mostly does not lead to a good outcome but rather incurs great mental stress.
Draft a solid plan, stick to it, and trade based on “knowledge and strategy” instead of relying on your “wishes and whims.”
2. Fix your trading hours
An unmanaged and haphazard crypto trading routine can be quite taxing, both physically and emotionally. While the crypto market is open 24/7, it doesn’t mean you should also access it without taking breaks. Most professionals recommend treating crypto trading as an “office work” or “part-time job” where the number of working hours is fixed. It is essential that you sit in front of screens only for a number of hours daily in order to function like a normal person.
That is not to say that you’ll not miss any good opportunities by limiting your trading hours, but just digest this fact & cope with this reality as staying sane is also important.
3. Accept the losses
Losses are a natural part of the crypto trading game; you should confidently accept them and take them as a lesson for improving your shortcomings – if there are any. Dissension with losses only stimulates a spree of anger, frustration, depression, and regret that offers you no advantage.
Therefore, the best thing to do under losing circumstances is to carefully analyze what happened and why did it happen. If it’s just a stroke of bad luck where your decision was not basically wrong, you can just move on as it happens in financial markets. However, in case you made a mistake, try to determine its root cause.
Having a mindset to learn from your losses can not only make you self-assured but also ward off any pessimistic sentiments.
4. Never invest more than a limit and rein in your greed
When you put more money in crypto trading than what’s affordable for you to lose, the mental strain is also leveled up accordingly. It is natural to make rash decisions when your bread and butter becomes dependent on the trading results – so make sure to never reach this point.
If you want to remain pressure free with a healthy mindset, stay away from investing beyond a certain limit due to greed as it never ends well. Moreover, make “risk management” your motto while trading cryptocurrency.
5. Control your emotions. Do not get overwhelmed
As it might be obvious at this stage, emotions should be entirely separated from trading, both for mental stability and good trading performance. Most traders begin to feel over-confident and euphoric soon after getting some consecutive wins while losses bring out anxiety and anger. Be it overly positive or negative emotions, trading under their influence can be disastrous for you in financial as well as psychological terms.
To stay comfortable in the crypto trading sphere, you must detach all emotions from your trading plans & strategies. While it is not possible to entirely remove the “emotions” element, you can certainly keep them at bay and not let them affect your trading results. It wouldn’t be wrong to say that the dictum: “invest only what you could afford to lose” plays a big role here – no extra investing, no extra emotional baggage!
6. Keep things simple and trade less
A forever golden rule is to never make your life solely about “earning.” Focusing too much on finances can greatly disturb all other life activities, making a person feel distressed and on edge most of the time.
Try to prioritize quality trading over trading too much. ‘Keeping your trading system simple and working smarter but less’ might be the right recipe for feeling relaxed in the crypto trading arena.
7. Go for outings, meet friends, and set your priorities straight
To abate the nerve-wracking effects of crypto trading, why not regularly leave your trading box and refresh your mind by meeting your friends or going on outings?
Don’t forget to value your time as much as you focus on money. Success is not all about earning cash but also about valuing “yourself”, “your time”, and “your convenience.”
While trading crypto, remember to question yourself at what cost are you making this money? Is it worth it? In case your crypto trading routine is disrupting your whole life, take a step back as you are surely on the wrong track.