Do you think traders always have a specific strategy while investing in cryptocurrencies? Sometimes they do; sometimes they don’t. When they don’t, they trade emotionally. It’s somewhat like betting in a horse race. You win a game, you increase your stakes, but you lose the next round. You fear that if you bet on the next game, you may fail, but you bet anyway in an attempt to cover your losses. And you lose again. This cycle happens in crypto trading as well.
According to Ben Armstrong, fear can force you into making erratic decisions, something that’s not preferred in crypto trading. Ben is a crypto enthusiast who provides updated information about the crypto market on his YouTube channel BitBoy Crypto. He thinks that if you can recognize your fear and keep it under control, you can make rational decisions with your investments.
Anxiety in crypto trading
Many studies show that anxiety creates cognitive overload leading to poor performance in tasks that demand concentration and logical thinking. Crypto trading requires that type of attention. Traders need to assess the market scenario and analyze what’s the best thing to do. If you keep fearing that any decision you take would result in significant losses, then crypto isn’t the right vehicle to invest in.
Ben has had the experience of interacting with various investors and industry experts on his YouTube channel. And most of these experts have the same thing to say: fear can sidetrack your mindset. It causes you to focus only on your bad trades instead of making more informed judgment calls for your next investment. If you have a negative attitude because of a few disappointing returns, you will eventually create a downward spiral that limits your insight and logical thinking.
Why is fear detrimental in crypto trading?
Being cautious is one thing, but it’s a different game altogether if you fear your previous decisions. According to Ben, newbie investors fear initially that they have to deal with additional factors in crypto trading that they previously didn’t have to tackle in traditional stock trading. Moreover, market volatility is another reason why investors feel they shouldn’t make the most of a golden opportunity to get high returns.
Many veteran traders have a 60% success rate. Does that mean 40% of the time they are wrong? What if you came to know that 40% only amounts to 5 or 10 trades? If traders start fearing these ten trades, they won’t make it big in this industry. It would steer them away from making the right decision at the right time.
Of course, making a string of bad trades hurts. But that doesn’t mean you can’t come back stronger. If you follow Ben’s YouTube channel religiously, you will stay updated about the latest crypto news and learn various trading strategies. You can make your investment decisions based on the market conditions and not lose your money and become bankrupt because a few trades didn’t go according to plan.