✅ The Do's and Don'ts of Emotional Trading
DO'S:
1. Create a Rigid Trading Plan
- Define entry/exit points, stop-loss levels, and position sizing before trading. Automation (e.g., bots) enforces discipline .
2. Diversify and Size Positions
- Allocate ≤5% per trade to avoid ruin. Diversification reduces emotional attachment to single assets .
3. Practice Mindfulness
- Journal trades to identify emotional triggers. Take breaks during volatility to reset decisions .
4. Backtest Strategies
- Validate approaches using historical data (e.g., via YouHodler’s demo accounts) .
DON'T:
1. Succumb to FOMO/FUD
- Avoid chasing pumps or panic-selling dips. Verify news sources before acting .
2. Trade on Overconfidence
- Even "sure wins" require risk management. Overconfidence bias leads to reckless leverage .
3. Ignore Institutional Activity
- Whales manipulate prices near psychological levels to trigger stop-losses. Place orders slightly off round numbers (e.g., $49,800 vs. $50k) .
4. Revenge Trade
- Losses are inevitable. Avoid doubling down to recoup losses—this compounds errors .
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