As is known, in 90% of cases, the mistakes that traders make occur at moments when they fail to control their emotions. Yielding to the fear of loss or greed, which are the main enemies of the trader, they make rash decisions and ultimately have to part with a portion of their deposit.
However, it is difficult to argue with human nature, which has embedded changes in the chemical composition of our blood, transformed under the influence of hormones.
Thus, at moments when we see growing profits on the computer or smartphone screen, our mood improves and dopamine is produced. The joy hormone tells us: 'Success is near, let's go for more!'
And in such moments, we thoughtlessly increase the volume of the trade. At the same time, after experiencing a failure, we feel the influence on our brain of the so-called sadness hormone, namely a mixture of cortisol and prolactin.
As a result, we start to feel a depressed state, which is replaced by a desire to quickly fix everything to regain the lost euphoria. How such actions end is well known to many of us.
How to cope with yourself and avoid mistakes
To avoid succumbing to the influence of natural forces that compel us to make rash decisions in the cryptocurrency market, there is only one correct remedy. You must strictly follow the trading plan!
For this, you first need to clearly define your trading approach, so you know exactly what time frame you intend to act within.
Because what you choose: intraday trading, scalping, medium-term trading, or long-term investing will depend on your psychological mindset, determined by the target levels on the chart.
And already based on the period you will be trading, you can proceed to the next stage of working on your emotions.
Defining goals
Before starting to open a trade, experienced traders always make preliminary calculations, clearly identifying the levels at which the entry point into the market will be determined, the trade volume, as well as setting stop-loss and take-profit orders.
This not only allows you to see how reasonable the trade is, but also guarantees you peace of mind during its execution.
Because when you clearly understand how much you will lose in case of failure, know what profit you are risking for, and how much time it will take, you stop being nervous, thereby reducing the level of hormones in your blood.
Thus, if you adhere to a trading plan, your emotions will find it much harder to take control of you than when your trading is associated with chaotic price chases.
