In the currency circle, everyone likes to stare at the K-line and the newsletter, expecting their coins to rise. This process is influenced by FOMO (fear of missing) and FUD (fear, uncertainty, doubt), which creates a risk based on emotions rather than facts. In order to reduce risks and avoid losing money in the currency, controlling emotions is crucial. The following guidelines are designed to help you avoid letting your emotions affect your trading.
Before you start trading, the most important thing is to clearly know what your goal of investing in cryptocurrency is. Before buying any coins, ask yourself the following questions:
1. Is your investment risk preference suitable for high-risk currency circles? Do you have other savings deposits for yourself to stay on the road? If not, the currency circle may not be a good place to invest.
2. Can you bear the risk of zeroing? Not only does the price of the currency plung 99%, but there is also the risk that the exchange and the wallet will be black and the assets will be lost.
3. Do you know the risks and volatility of the currency circle?
4. Do you want short-term speculation or long-term holding?
Before the purchase of coins, background research on the currency and its underlying technology is crucial. Be sure to read the project's white paper. Many people buy coins in addition to knowing the letter code of the coin. Although these two things cannot guarantee that you will be able to invest successfully, they can help you better understand the coins you want to buy.
Have a clear understanding of the project, can reduce the interference of external market sentiment, if you buy a coin that you don't understand at all, and you encounter false negative news in the market, you may not panic?
Choose the right exchange and wallet
Choosing the right exchange and wallet is based on your plan to find out which exchange can help you achieve your goals. If you want to play the altcoin, then the currency is suitable for you, and the currency is the base camp of the altcoin. If you want to play a futures contract, OKEX, BitMEX is for you. If you want to be a long-term investor, you can deposit the currency into the decentralized wallet and save the private key.
The first consideration for choosing an exchange and a wallet is security, which is the most important, because in the event of a security incident, your mind will explode. First try the platform login process, the stricter and safer. Any risks of viewing news and reports related to the platform on the Internet may have a bottom in mind, and the coins can be reassured.
You must know how much you can invest in the currency and stay within this limit. How much you want to invest depends on your plan (see point 1 above). The currency circle is very risky, so you should only invest money that you can bear the risk of zeroing. Once you have set this capital investment limit, you must stick to it. Don't decide to invest more money because of a whim or because you are afraid of missing. According to past historical experience, this is often the beginning of disaster.
Those who do not leave their own way, it is difficult to be rational, is the most vulnerable to emotional influence, and then make wrong investment decisions, and often end in tragedy.
Set stop loss point
Stop loss must be set before entering the market and strictly enforced. If the price of the currency falls rapidly, setting a stop loss can protect you from excessive losses. Stop Loss Order allows you to set the price of the currency to sell after falling to the minimum price. Setting a stop loss also helps lock in the gains.
Stop loss is anti-human, because there is sunk cost, the more you invest and lose, the more you are reluctant to cut meat. But in the high-risk market of the currency circle, stop loss is extremely important. Look at the people around you, how many people are being shackled.
Don't pay too much attention to the market
At present, the fluctuation of the currency market is extremely intense, which is also the attraction of the currency circle. The price of the currency can be multiplied in an hour, which creates a profiteering opportunity. At the same time, the price of the currency may be like a roller coaster. Staring at the market can cause your blood pressure to rise, causing an emotional reaction that leads to panic selling or high buying because of "fear of missing."
Traders should stay away from the disk, because the source of your greed and fear is the fluctuation of the price of the disk. You may not be able to control your emotions without watching the market. Of course, the traders in the day are exceptions, they need to look at the market. If you invest in a long-term trend, you don't have to stare at it every day, and it will be affected by the fluctuation of the price of the disk.
Watching the disk is a waste of life. Sometimes the farther you are from the disk, the easier it is to make money. The closer you are to the disk, the easier it is to lose money.
Write investment diary
Write your investment plan and write on it if it violates how to punish. Do not use is a confession of the mind, it is recommended to use corporal punishment. For example, today's violation, pumping 100 big mouths, if you can't get it, then no move.
to sum up
Buying and trading coins can be exciting and have potentially high profits. But it is also accompanied by risks and uncontrolled emotions. The market will always surprise you. If you can't control your emotions well, you will be trapped again and again, or you will be able to escape the fate of failure if you ignore the risk and chase.
Although there are many market analysis methods, the task that remains unchanged for investors is that they do not have to be rigorous in theory, just control themselves. Learn to control your emotions and change the door to financial freedom.