day trading

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.

Use preliminary analysis

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.

  • If you are a day trader, think strategically and understand the current market situation before opening positions. In particular, it is worth finding out what important financial and economic news could impact trading today.
  • The publication of a company’s financials for the quarter may change the value of its shares on the stock market. In the cryptocurrency market, prices may change depending on regulators’ statements or after the appearance of news about the upcoming hard fork. The trader should also consider aspects such as volatility, narrowing, and divergence of the trend channel.

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.

Learn to read charts and key patterns

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.

trading signals app

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.

Discipline and FOMO

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.

  • FOMO is a key motivator for impulse buying, but such sudden decisions can negatively impact your trading portfolio. Of course, in some cases, impulsive asset purchases do bring quick profits and a sense of euphoria. In the long run, however, such a strategy is far less reliable than careful calculation. It is clear that any investor wants to earn as much as possible, but it is better to plan each step than jump into the unknown. Haste and greed can lead to serious losses.
  • FOMO is one of the factors that shape price movements. Without it, trend reversals would be less frequent. Simultaneously, FOMO dynamics sometimes resemble a rushing freight train, and the only discipline will help not fall under it. When the market is driven by fear, it can easily drag you along if the price suddenly reverses. It is better to follow the chosen scheme calmly because a crypto trader chasing a shadow of profit is doomed to run in circles.
  • If you are chasing the market, you run the risk of making a mistake, and when reading charts, you will see buy signals everywhere. In this case, the reversal after FOMO will ruin you. You can check the trading signals app to help reduce stress.

A disciplined trader only opens a position if he sees a reliable indicator that the trend will continue. FOMO crypto traders operate oppositely.

Follow trading strategies

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.

crypto trader
  • There is no place for risk management, which disciplines the trader in panic trading. When you make impulsive trades, you use a trading volume that should be several times less.
  • When a crypto trader has a well-thought-out strategy, he does not need to engage in panic trading. And if he decides to enter a strong uptrend, it does not contradict the strategy. Let’s not forget about the risky but profitable cryptocurrency derivatives market, where traders often make money on pumps and reversals.

Focus on strategy and deviate slightly from it when it is completely justified. Do not ask for trouble.

How to maintain discipline in trading?

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:

  • Set clear goals.
  • Plan your daily routine correctly.
  • Use a trade journal.
  • Committed to strategy.

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.

  • You need a good strategy, experience, and discipline. A crypto trader who uses this type of trading needs to quickly open and close trading positions, not forgetting about risk management to make money on day trading. If you decide to engage in margin trading in derivatives, be careful when choosing the leverage size because what can make you rich can overnight and ruin.
  • Using the trading signals app and a trading robot helps traders avoid emotional decisions because they do not need discipline since it executes the algorithms programmed into it. At the same time, when trading manually, the trader runs the risk of opening too many positions or exiting the market too early.

The discipline develops several useful qualities in the crypto trader.

  • Patience. The investor must wait for the right moment to enter and exit following the strategy. Unfortunately, novice traders often open and close positions suddenly and thoughtlessly, which is extremely risky.
  • Ability to adapt. It is the other most important investor quality because every new day on the market is not like the others. Strategy building should be based on analysis, but it does not mean blindly following some methods from textbooks. In contrast, the ability to quickly adapt to volatile aspects is just as important as patience. Discipline includes being able to understand even when it is best not to follow the strategy.

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.

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