Many cryptocurrency traders are interested in learning the science of analysis, whether technical or fundamental, and then they think that they are ready to try trading with their money, but is the science of analysis or following someone’s recommendations enough to make a profit?
In several experiments on local and global stock market traders, we find that many traders are influenced by their feelings when making a certain decision regarding trading, so learning analysis or following a recommendation is not enough to make a profit.
Do my emotions really affect my trading?
Just as your feelings greatly affect your life decisions, they also affect your trading decisions, and this may happen involuntarily. You may see a chart of a currency and be certain that it will rise simply because of your “feeling,” even though all indications predict a decline in the near term for this currency, and vice versa.
Do you see the picture well? When you lost your money, which of these factors contributed to your loss?
Were you hoping to make more profit and then the currency trend turned against you?
Were you afraid of not meeting your profit target and closed your trade with a small profit?
Van Tarp, a doctor specializing in psychology, says that the trading process is divided into three categories, and he arranged the categories according to their importance as follows:
Trading Strategy (10%)
Money Management (30%)
Psychological factors (60%)
So first you must have a plan to manage your trading, second you must learn how to manage and divide your capital according to your plan, and third you must maintain your focus and emotional discipline.
It is okay to take a break from trading in order to come back stronger, and this is better than being stubborn and continuing your losing trades. This does not mean that you should close your losing trades (if any), but develop a strategy to manage your money in order to exit these trades with a profit.
