Psychological state in tradingThe important point is to describe your psychological state in two cases:
When you are not in a trade.
When you are in a trade.
In the first case, the common problem is missed profit. Often, novices take this very painfully and think about the missed opportunity that could have brought them potential profit. However, the market, especially the cryptocurrency market which operates 24/7 without breaks, has many trading ideas and opportunities, so there is no need to fixate on it or torment yourself with it.
Therefore, when you are not in a trade, try to describe your psychological state, what you feel at that moment, whether it's the fear of potential loss from missing a trade or something else.
In the second case, when you are in a trade, you need to describe your state, what worries you. It could be greed to fixate profit or fear of losses. In both states, you need to fully describe yourself, the trading setups that cause such emotions.
To avoid these emotional swings, you should have a clear plan for taking profit and an approximate loss in case of failure before entering a trade. When you do not have such a plan, you will swing back and forth, and the outcome may be negative. Therefore, when you are in a trade, describe your state in detail and document it in a journal related to your psychology, as psychology is 80% of successful trading.
All these aspects will help you learn more about yourself and your psychology, which will enable you to build your trading strategy, as psychology accounts for 80% of successful trading. That's why soulless machines, neural networks, and AI are so good at trading compared to humans with their emotional instincts.
Because many people want more profit here and now, they are not willing to bear losses, develop, or understand themselves. Due to this incorrect psychological mindset, people often lose money and then blame trading for being a casino. Of course, it's a casino for ludomaniacs who, without a strategy, listen to "experts on Instagram" and are already turning to the 30th leverage for a short.
I hope you understand why this aspect is necessary. Nevertheless, in subsequent articles, we will try to describe more about psychology in trading.
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✅Disclaimer: Please be aware of the risks involved in trading. This idea was made for educational purposes only not for financial Investment Purposes.
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