The main psychological traps for a Novice Trader
Table of Contents
The main psychological traps for a novice trader
Even with knowledge, beginners can make bad decisions under the pressure of emotion. Bitxmi experts explained why this happens and how to stop making the same mistakes.
In addition to technical and fundamental analysis, the correct psychological attitude plays an important role in trading. Under the pressure of emotions, you can commit rash acts, which usually cause serious losses.
It is noteworthy that often beginners make the same mistakes that prevent them from making a deal and making a profit. In this article, BitXmi experts have identified some of the most common psychological traps that beginner traders fall into.
Premature exit from the deal
At the first successful transaction, newcomers to cryptocurrency trading strive to take profit as quickly as possible and close the position prematurely. In this case, they lose part of the profit that they could have gained. In such situations, traders find themselves who did not conduct a thorough analysis of the asset before the transaction.
“Before investing in any cryptocurrency, you need to properly study the asset, see what is behind it – real market interest or excitement, what kind of team is developing it, whether it is currently trading at its peak or not,” – the experts explain.
Dependence on other market participants
At the beginning of their formation, many traders are guided by the signals and opinions of already established market participants. However, in order to maximize the benefits, it is necessary to become independent of these factors, according to BitXmi experts. A trader can gain independence only if he develops his own strategy of work and will strictly follow it.
“Studying other people’s experience can help you with this. However, when you are in the market, follow only your own rules and listen only to yourself, ” – the experts emphasize.
The cryptocurrency market is highly prone to emotional trends. Quotes immediately react to a variety of statements and rumors, so it will not be possible to completely get rid of the influence of emotions. Novice traders should not fuss but should approach buying assets with a sober eye. There will definitely be failed decisions, you need to force yourself to analyze them. No trader works without losses.
Euphoria from the first deal
The first profit brings positive emotions to the trader, which can only push him to break discipline. In the long term, this can lead to the fact that the money earned can be lost as a result of a failed transaction. In order not to fall into this trap, you need to withdraw part of the profit received and spend it on something tangible.
Also, Bitxmi experts recommend that beginners do not use leverage, calculate profit as a percentage, follow the diversification rules and strictly adhere to risk management.
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