In the profession of a crypto trader, events are developing so rapidly that technical skills and knowledge alone are not enough for success. Of course, a trader needs to know and understand the principles of cryptocurrencies, the history of each project, current trends, and use the trading signal apps. But profitable investing also has a psychological side, the importance of which is often underestimated, and this is a discipline.
Anyone familiar with the dynamic world of cryptocurrency trading knows how quickly decisions are required to enter and leave the market on time. With high psychological stability, a crypto trader will be able to fulfill these requirements and trade successfully.
The ability to maintain discipline and develop robust trading strategies without regard to emotion is the secret ingredient to any trader’s success.
Abraham Lincoln once said of the importance of preparing for any activity, “Give me six hours to cut down the tree, and for the first four hours I will sharpen the ax.” This quote applies to almost all actions in our life, including trading. You need high-quality and scrupulous fundamental and technical analysis to make objective decisions.
The thorough preliminary analysis allows the crypto trader to plan the trade efficiently. Using this kind of pre-bidding analysis, you will create a solid anchor for yourself to help maintain discipline.
A key element of trading discipline is the ability to rely on real market data when entering trades. Many people prefer to focus on the general market sentiment and make decisions based on rumors and news; such crypto traders rely more on fundamental analysis. An alternative approach is to learn how to read charts and make decisions using price patterns, in which case there is no need to read news and financial reports. You will have to practice and spend a lot of time, but the result is worth mastering this method. The main feature of technical analysis is that you can use strategies created on their basis for automated trading or trading bots. Moreover, you can use the trading signals app to make your investment easier.
A disciplined crypto trader is more likely to choose a project asset for trading, which has many users, serious and well-known partners, as well as a transparent business model. In the stock market, the best choice is stocks of companies that regularly pay dividends. In the digital industry, a crypto trader must make decisions based on a thorough market study: this will help him open and close a position in time.
By doing the analysis correctly, you will maximize your chances of being consistently profitable. It is the whole point of trading discipline. The more strictly you adhere to the chosen approach, the higher the probability of making a profit.
Crypto traders are well aware of the disastrous panic trading, be it FOMO (fear of missing out) or panic selling. FOMO is based on emotions, the trader, by all means, wants to buy an asset, fearing missing out on the profit. Positions opened under the influence of FOMO usually do not lead to anything good.
A disciplined trader only opens a position if he sees a reliable indicator that the trend will continue. FOMO crypto traders operate oppositely.
Failure to adhere to the chosen trading strategy is the exact opposite of discipline. Trading under the influence of the FOMO relies on inexplicable expectations of price increases rather than logical thinking. Even if some of your decisions made based on FOMO turn out to be successful, it is more likely an accident. It is much wiser to follow various technical and market indicators and analyze the situation objectively.
Focus on strategy and deviate slightly from it when it is completely justified. Do not ask for trouble.
Acting with discipline when opening long-term positions is one thing, but day trading is completely different. Day trading is much more difficult psychologically and technically, as it relies on rapid and short-term changes.
To maintain the discipline of a crypto trader, you must:
If you look at the trading dynamics on modern platforms, it becomes clear that intraday trading is one of the fastest-growing segments of the cryptocurrency market.
The discipline develops several useful qualities in the crypto trader.
You must remember that some of your trades will inevitably be unprofitable if you are a day trader. In such situations, it is essential to maintain objectivity and not open new positions under the influence of emotions, especially in an attempt to recoup. Even the most successful crypto traders sometimes make mistakes, but they profit more often because they have learned to discipline themselves. Even if a series of losing trades overtake you, do not let it influence your decisions. Stay reasonable and focus.