reasons for bad trading
reasons for bad trading
many times while trading we let our goals down and get greedy or fearsome. the problem are the reason behind, mostly psychological reasons.
two scenarios
a. price went +20% up, we dont sell.
reasons
we dont need the money now
we anticipate more gains (greed, market sentiment)
we see others with more gains (greed, jealousy)
we dream of million (greed, new life vision)
b. price went -25% down, we sell.
reasons
we need the money now
we are fearing it will crash more (fear, market sentiment)
we doubt our initial decision to buy (judgement by single point of time)
we see others leaving the investment (fear, mass psychology, group)
we see other investment that are not -25% (fear)
thats why many books advice to trade in smaller steps. dont go with a gut feeling, set a goal and stick to it.
the biggest impacts to our psychology? maybe the media, the news, the rumors.
we read something and anticipate that it will move ‘others’ and so we act on our own.
we do it, but we have no idea what it should mean. what should a musk tweet mean to a price? 3%? 10%? what should india banning crypto mean?
This is a relevant topic nowadays there are a lot of people right now as we can see right now because of the downtrend of the bitcoin there are a lot of people getting feared to lose their assets and what’s the cost? they sell most of them just to save their money but again if you are not having a strong belief and hands with your coin have it’s hard to get back on track. Once you make an investment its better to make a background check, check the market trend, analyze the graph and more possible data that might give you an information about the coin you want and you have avoid getting a speculation of other people they cannot survive your coin its all up your decisions.