Trading Psychology and Crypto Emotions (Part 02)

In the last post I discussed with you the importance of psychology and emotions in the crypto sector. There some basics are discussed and basic concepts are given. Today's post will highlight the importance of psychology and emotions to you because understanding emotions and psychology is very important for those who work, invest or trade in this sector. In fact, why emotions and psychology are important, I will try to discuss them in detail here.

Crypto markets are very different from traditional stock markets. While volatility exists in all financial markets, in crypto, it’s on another level. A coin’s value can rise by 20% in the morning and drop by 30% in the evening. It’s almost like a rollercoaster! Now, I’m not saying this to scare you. I’m telling you this because it’s a reality you need to be prepared for. Trading psychology is so critical in crypto as there’s a lot of hype and speculation in the market. Whether it’s news about a government regulation, a celebrity endorsing a coin, or even rumors spreading on social media, the market reacts strongly. As traders, you will constantly be bombarded with this noise, and if you let it affect your decisions, you’re in for a tough time.

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Let me give you a real-world example from our local Bangladeshi context. Imagine you’ve invested in a particular altcoin, and suddenly, you hear rumors in a Facebook group that this coin is going to crash. What will you do? Will you sell immediately out of fear? Or will you stick to your original trading plan? This is where your trading psychology comes into play. In situations like this, if you react emotionally, you’re likely to make mistakes.

In the next part of this topic, I will share some content with you about what kind of emotions can be in the next post.

~ Regards,

VEIGO (Community Mod)