HOW TO IMPROVE PSYCHOLOGY IN TRADING

[TradeCoinD2]

Here are 5 principles to help improve your psychology when trading:

1.Cut Losses Immediately When Realizing a Mistake

*For example, if you realize you've placed the wrong buy/sell order, incorrect volume, or deviated from your trading criteria, cut losses immediately. Recognizing and rectifying mistakes promptly demonstrates maturity.

2.Don't Overcrowd a Single Position with More Than 3 Trades

*Most account blowouts in trading occur due to overcrowding positions, especially with high leverage, and going against the trend during strong momentum. This can lead to account depletion.
*Overtrading often involves emotional decision-making, making it subjective. Without a clear plan for overtrading, it can become akin to emotional gambling, leading to difficulty in cutting large losses.

3.Don't Trade More Than 3 Pairs in One Day (Preferably Focus on One You Understand and Have Experience With)

*Successful traders often specialize in a specific coin or token, mastering its price movements. They consider it a gold mine. Trading fewer pairs helps develop an intuitive sense for the market, reducing the need for extensive analysis.
*Trading less frequently but focusing on quality trades often improves profits and minimizes losses in markets where you're not an expert. Even if you have a trading system, applying it to different assets can lead to different outcomes.

4.Reduce Trading Volume as Losses Increase, Balance Emotions, and Stabilize Your Mindset

*When losses exceed 3% of your account (or a predetermined threshold based on your account size), or if you lose 2 trades in a day, it's advised to stop trading temporarily. Use this break to review your losses, identify where you went wrong, and analyze how to improve.
*When you can't maintain a calm mindset and are driven by emotions, seeking revenge on the market is counterproductive. Getting emotional with the market leads to trouble.

5.Take Profits and Know When to Stop

*Taking profits is the most crucial skill for earning a living through trading. Profits should never be ignored.
*Stick to your own trading system when taking profits. Divide your profits into multiple tiers, avoid the regret of missing out. Remember that money is still there, the market remains, and opportunities are abundant.
*Always appreciate yourself for knowing when to take profits.

[cryptoworld1]

Table of Contents
1 Create a Trading Plan.
2 Take Regular Breaks.
3 Don't Quit Your Day Job.
4 Accept That You Will Lose.
5 Practice, Practice, Practice.
6 Use a Take Profit and a Stop Loss.
7 Backtest Your Trading Strategy.
 
Trading is 90% PSYCHOLOGY and 10% wating.

[TradeCoinD2]

Table of Contents
1 Create a Trading Plan.
2 Take Regular Breaks.
3 Don't Quit Your Day Job.
4 Accept That You Will Lose.
5 Practice, Practice, Practice.
6 Use a Take Profit and a Stop Loss.
7 Backtest Your Trading Strategy.
 
Trading is 90% PSYCHOLOGY and 10% wating.

That's right, doing so would mean that we can't incur too many losses

[tranthidung]

Some of ways to improve your psychology in both trading and investment is understands about its cycle.

• The psychology of market cycles
• Wolong: The Game of Deception.
  
  • This is my favorite trading story and you can learn a lot from it. It is about Dogecoin manipulation many years ago but its value is applicable for other cryptocurrencies and is still usable today because majority of market participants fail to change themselves and their psychology control.
• You will always feel more relax, less stressful when you are trading with a demo account (no real money from your pocket).
• Don't touch Leverage/ Margin or Futures trading
  
  • You will always feel better (more relax, less stress) when you are trading with Spot than with Margin / Leverage, Futures.

[Ambatman]

The sad thing is despite knowing all this
Most people, I included still act irrationally during losses
You get clarity after the trade ends either intentionally or liquidationally.
You promise yourself I won't be controlled by my emotions
But it's easier said than done
I believe trading with a money you can willingly loss would reduce stress and reduce emotions attached to trading.
Getting emotions partially/in check
I believe defines an experienced trader.
Even holding is a psychological battle
But less destructive than trading.

[Gm Jutt]

It is important to know when to stop trading to keep a healthy mindset. Sometimes... we can get too catch up in the excitement of the market and keep trading even when we are tired or not thinking clearly.
By following these principles which you have shared we can improve our mindset when trading and have a better chance of be successful. Remember... trading isnt just about knowing the technical stuff and the market... but also about managing our emotions and staying disciplined.

[lionheart78]

It is important to know when to stop trading to keep a healthy mindset.

If trading is the major source of income, the person won't stop trading.  It is best to say to cut losses by simply implementing a cut loss strategy wherein a person set-up a selling price to reduce losses when the market is plummeting.

Sometimes... we can get too catch up in the excitement of the market and keep trading even when we are tired or not thinking clearly.

This is only applicable to newbies I think, because those who have experience never go with their excitement, they always study the pros and cons of investing and trading stuff.

This is one good suggestion from Investopedia

Knowledge and Experience in the Marketplace
Individuals who attempt to day-trade without an understanding of market fundamentals often lose money. A working knowledge of technical analysis and chart reading is a good start. But without a deep understanding of the market and its unique risks, charts can be deceiving.

Do your due diligence and understand the particular ins and outs of the products you trade.

[yawar20]

Personally I think Improving psychology in crypto trading is crucial for long-term success, as emotional decision-making can lead to impulsive actions and poor financial outcomes. But just remember Accept Losses as Part of the Game is what made you strong each time

[gulu_khan]

If you make a trading mistake like the wrong order or volume, or if you deviate from your plan, cut losses right away. Acting quickly shows maturity in trading and stop your loss.

[Faisal2202]

1.Cut Losses Immediately When Realizing a Mistake

*For example, if you realize you've placed the wrong buy/sell order, incorrect volume, or deviated from your trading criteria, cut losses immediately. Recognizing and rectifying mistakes promptly demonstrates maturity.

It would be so obvious, because if one knows he goes the wrong way and is facing consequences too then why would someone still be testing that theory, the real question should be, what would a trader do if he made some trade mistakenly and is in profit, should he go with it or just book the profit and exit the trade? I know the answer is easy but it does not mean your trading criteria will always be right.

This can lead to account depletion.

I did not know overtrading with high volumes, can cause depletion of accounts, as I am not into future trading or I have never traded an extreme number of trades so I had no idea about it.

[Sim_card]

Trading is something that we talk about all the ways to limit risk, so that we can gain profit but when we are in the market, we forget all these theory because when we are trading we see something different, which makes us uncomfortable with the market and we tend to allow our emotions to control us, thinking that is the right way out of loss. A professional trader only knows how he manage his losses and make profit to recover his losses, due to his own strategy. This is because in trading the strategy that works for you might not work for me. The fact is that with all the theories, the best way to stay way from loss is only to use the money that you can afford to lose to trade so that you can learn and give more time to the market by practicing and discovering your own strategy that can help you limit your loss and make profit. However, most people think trading is easy but it is the most difficult, because you are predicting what will happen next.

[DabsPoorVersion]

1.Cut Losses Immediately When Realizing a Mistake

*For example, if you realize you've placed the wrong buy/sell order, incorrect volume, or deviated from your trading criteria, cut losses immediately. Recognizing and rectifying mistakes promptly demonstrates maturity.

It would be so obvious, because if one knows he goes the wrong way and is facing consequences too then why would someone still be testing that theory, the real question should be, what would a trader do if he made some trade mistakenly and is in profit, should he go with it or just book the profit and exit the trade? I know the answer is easy but it does not mean your trading criteria will always be right.

If a trader mistakenly places his position in the opposite direction of his technical analysis and earns a profit, the answer is clear. The trader will go with it and most likely set a take-profit target to secure the position. An experienced trader won't close his position without securing his profit. That's for sure. They will always have an action plan to avoid losses as much as they can.

[surendertakyaan70]

First of all we have to develop emotional intelligence. All investors in the crypto market need to be aware of their emotions and learn to manage them. Disciplined planning and structured approach during market conditions with their policies while setting up strong trading plan with full confidence. It is important to continuously learn and understand the dynamics in the market. Building a supportive investor community can provide invaluable psychological support

[Callisto]

Great principles for improving your trading psychology! It is important to develop discipline, control emotions and stick to strategy. Thanks for the detailed tips!
Don't forget that successful trading is a learning process and every trade, even if it ends in a loss, can bring valuable experience. Constantly analyze your actions, strive for continuous improvement and remain patient in achieving your trading goals. 🚀💹

[jeraldskie11]

1.Cut Losses Immediately When Realizing a Mistake

*For example, if you realize you've placed the wrong buy/sell order, incorrect volume, or deviated from your trading criteria, cut losses immediately. Recognizing and rectifying mistakes promptly demonstrates maturity.

If we are going to do a trade we make sure that we do it correctly, but sometimes because of imperfections we didn't noticed it until we execute a trade. That's why we should really close the trade immediately right after we found out the mistake. It doesn't matter if we cut for a loss, what's important is to avoid the potential losses.