Have you been trying to profit from Bitcoin trading? If your answer is yes, then you are not fighting alone.
No matter how people say on Twitter, virtually everyone will not trade. A study found that 96% of foreign exchange traders quit angrily after losing money, and active password traders are likely to experience similar failure rates.
It’s all because they make the same mistake again and again.
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But as anonymous trader Bitcoin Macro said, you don't have to succumb to the same fate.
Here are four reasons why you are constantly failing to trade cryptocurrencies, and why you should change your strategy accordingly.
Fear of bargaining
Bargain-hunting is one of the most profitable transactions in cryptocurrency trading. But it is also a difficult step.
First, the decline stopped. After a downtrend lasts for months or even years, assets suddenly stop falling below a certain price level. For Bitcoin, the price of the cryptocurrency bear market last year was $3,000.
Second, assets begin to trade over long periods of time within a certain price range. In the case of Bitcoin, this number is between $3,000 and $4,000.
If you notice these two signals, it is very likely that the market has bottomed out. When the market bottoms out, you will have plenty of time to buy coins. Trader Bitcoin Macro perfectly illustrates this in a tweet.
“People have four months to buy $3,000 in bitcoin… all you need is courage and patience, courage + patience = financial freedom.”
Everything is not without warning. All you have to do is click "Buy" and you will experience 300% of your account today. But you are too scared to take this step.
2. Emotional loss of control
In trading and investment, emotional costs are high. Any emotion, such as fear or excitement, will cost you money.
The bull market is the best time for asset appreciation. However, fear prevents many people from entering the market at the right time, especially during the callback period. Therefore, when assets resume their upward trend, they are left behind.
Bitcoin Macro says:
"Bitcoin reaches $14,000 = I really hope that I buy a little more than $10,000; ETH reaches $300 = I really hope that I buy a little more than $200. However, when the price is really When it is less than $10,000 and $200 = I am afraid, I don't want to buy."
If the market is on the rise, each callback is a buying opportunity. Even if you are not an expert, you know this. Unfortunately, for many people, emotions are number one, especially in markets with high volatility like cryptocurrencies.
3. Refusing to adapt to changing markets
Perseverance is the key to success in many areas, but not in the trading arena. Traders must be very flexible. They must be able to change their prejudice based on the information they provide to them.
Unfortunately, many traders have a hard time shaping a particular image in their minds. Even if the market told them to let go, they still chose to stick. Therefore, they suffered huge losses.
4. Trading for trading
Money is not bought by frequent trading, but patiently "sit" out. This is the advice of legendary trader Jesse Livermore.
All successful traders keep this in mind. You either wait for the perfect time or follow the trend. When your chances of success are high, you won't worry about the daily volatility.
However, most traders do the opposite. Their desire for profit led them to seize almost every opportunity. This not only wastes their energy, but also leads to pressure build-up. Therefore, when the right situation arises, these traders are unable to execute the correct trade.
5. Refuse Hodl
In this ever-changing cryptocurrency market, even professional traders cannot guarantee instant profit. Therefore, the best investment strategy is still Hodl. Don't influence your emotions because of price fluctuations, turn off your computer, and enjoy life.