Taking Emotion Out Of The Game
One of the biggest no no’s that you will see in trading is emotion. No matter what type of trading you are doing this can be a problem as you fight with yourself.
An example would be let’s say you buy bitcoin and three days later the price tanks! It drops 35%. Crap! Now what? The smart thing to do would be utilizing a dollar cost averaging strategy and buy more. Most people though at this point freak out and want to sell or get cold feet. They then do not complete the second purchase. This is emotion coming into the trading game which can cause huge problems. It must be controlled.
Never ever regret profit and feel guilty about lost trades. The thing you should have in place before even coming into the market is a trading strategy. Set yourself a plan of action. This should include goals and how you act according to those plans. This takes human feelings out of it and your actions are all pre-determined.
So I have hit my first goal of profit now what? Well, that is easy De-risk! Close out half of your position. Increase your stop loss to your initial entry level so you will not lose money at all. You can then set up a second target level which will help you close out a quarter of your position.
Emotion can be hard and we all struggle with it. We still struggle with it to this day! A solid game plan and adhering to that plan helps you not only de-risk but make consistent trades to help grow your portfolio.
-Above Crypto Team