Here are a few tips to keep your mind in tip-top shape over the coming crypto winter.
Put Down the Crypto and Relax
Breaking away from cryptocurrency might help you forget your losses and the lousy market circumstances. To keep your head from spinning, you may need to focus on anything else for a while.
You may improve, give yourself a break, or spend more time with your pals. It's also a good idea to turn off cryptocurrency-related alerts and delete any associated apps while you're away. Why waste time in the market if your efforts won't improve the issue?
Put More Emphasis On Process Objectives Than On Financial Results
Traders often put undue stress on themselves by setting lofty financial objectives they're unlikely to reach. Focusing on the steps involved in trading, such as adhering to your trade strategy and minimizing losses using stops, is more likely to lead to success. Thinking “If I trade the proper way, the gains will arrive” might be helpful. This will help if you put undue pressure on yourself to succeed due to financial concerns.
It's important to remember that significant bear markets have come and gone and that cryptocurrency values have fluctuated widely.
Even though prices have gone up and down, the crypto industry has continued to grow, with new players and projects permanently joining the scene.
Practices In The Mind
Mental rehearsals may help make potentially dangerous circumstances seem more comfortable. This is the best way to boost your mental wellness and overall productivity. You can better handle difficult situations if you picture yourself in their shoes ahead of time, both mentally and physically. The point is to put yourself in challenging situations, like waiting on a winning or losing transaction, until your reaction to them becomes habitual.
Fixing In Our Minds' Eyes
Try as much as possible to associate mental rehearsals with specific mental states. You can connect your mental state with your coping reaction by learning to put yourself in a state of calm and attention and then constantly practicing coping methods for hazardous circumstances. Then, when a stressful event arises, all you have to do is call on the practiced state of mind, and the coping behaviors will kick in automatically. For instance, if you mentally practice a method for hanging onto winning trades while preserving calm concentration, you'll find it simpler to handle the circumstance while maintaining mental calm the next time you encounter a winning trade.
Consider The Long Term Effects
When you're on the losing end of a trade, it's easy to get caught up in the emotions of the situation and forget that trading is a marathon, not a sprint. Spot traders who purchased Bitcoin at its high in 2017 were stuck with their investment until the market returned to that price in 2020. Ultimately, only the most patient and knowledgeable investors saw any return on their investments.
Many investors, unaware of the implications, attempt revenge trades. When a trader takes a significant loss, their natural reaction is to try to get even by engaging in revenge trading. After suffering a consequential loss or a string of losses, the act prompts them to try to earn a quick profit.
The Art Of Risk Management
Reduce your exposure to danger gradually. Risk amplifies the mental impact of a circumstance, raising the stakes in both performance and mental health. When traders attempt to expand their risk exposure rapidly, they may discover that a successful transaction with little risk and a single contract is no longer profitable with more significant risk and ten contracts. Trading on a smaller scale at first might be easier on your psyche than making a sudden, considerable jump into a larger scale when you might not be mentally prepared for it.
Before you invest a dime, go through a mental checklist. Reducing perfectionist standards at the start of every trading day is one strategy for lowering performance requirements. It's time to pause whenever the word “should” enters your mind. Goals like “earning a specific amount of money,” “trading with a certain frequency,” “making back money that has been lost,” etc., fall under the “shoulds” umbrella. Since unrealistic expectations are a common source of performance anxiety, establishing acceptable trading objectives for the day may go a long way toward relieving performance stress and enhancing mental health.
Gain New Market Knowledge
Many individuals entered the cryptocurrency market during the subsequent bull run that began in 2020. Because of how long the bull run went, most early crypto investors would have made a profit. Most people in this group didn't take the time to learn about cryptocurrencies before investing in a few popular tokens because they figured they'd receive a decent return if they did.
The potential for improvement and expansion exists throughout this time of year. Anyone can discover alternative methods to profit from the cryptocurrency market through tools. For example, you might trade employing short-term tactics like scalping or everlasting futures markets, which could be less susceptible to the impacts of the cyber rainy season.
Live Your Life
Focus on things other than trading and have fun. When something is crucial to success, the pressure to succeed increases dramatically. Traders with few outside interests are likelier to suffer from performance anxiety and mental health problems. If you put all your faith into investing and things don't turn out well, it might seem like the end of the universe. You can protect your self-confidence and mental health from setbacks in trading by spreading your hopes and dreams across multiple areas of your life.
Many traders who believe they have serious mental health issues are stuck in an unhealthy cycle of striving for perfection. This self-imposed pressure may quickly induce anxiety and, in turn, reduce productivity. The toll on your psyche can be high, and you may wonder if you'll ever make it if you keep feeling this way. Traders' mental health and trading performance may be vastly improved in remarkably little time if they focus on the issue's root (i.e., the high standards that cause them to feel stress initially).
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. His observations are his own and are not intended as investment or trading advice.