Crypto trading is no longer a novelty for many investors from all over the world as digital assets have become more commonplace in the portfolios of those looking to diversify their list of holdings. In the larger financial landscape, digital coins are something of a wild card. Their fluctuations and price volatility make the assets unpredictable, meaning that they have not yet entered the mainstream, as investors are worried that the losses associated with the ventures might end up surpassing their gains.
Having a comprehensive strategy that takes your particular goals and expectations into consideration is imperative if you want to be successful in your endeavors. Investors are constantly looking for the latest changes and developments when it comes to the XRP price prediction in order to build their portfolios and ensure more consistent gains. However, it can be quite challenging to remain disciplined in this environment, given how fast-paced it is. The fear of missing out is tough to avoid, as the mere idea that you might be unintentionally disregarding a once-in-a-lifetime opportunity is not easy to deal with.
However, being overly emotional and making decisions based on your gut feeling won’t take you very far and might actually cause you to lose money instead, even when you feel like you’re on the brink of making considerable earnings. The crypto market is a changeable, dynamic environment, which is precisely why you need a robust game plan before approaching it, as well as a set of rules that will allow you to protect your emotional well-being throughout your ventures.
FOMO
The fear of missing out isn’t a concept that applies exclusively to cryptocurrencies. The phenomenon was first described in 1996, approximately thirteen years before the launch of the first cryptocurrency in the crypto ecosystem. Marketing strategist Dr. Dan Herman conducted research and ended up publishing a paper on the subject in 2000. In fact, some believe that the idea can be said to predate the Internet, as the “keeping up with the Joneses” idiom would suggest. The term FOMO was coined by author and venture capitalist Patrick J. McGinnis in a 2004 op-ed published in The Harbus, the Harvard Business School magazine.
In simple terms, the fear of missing out results in feeling apprehensive that you haven’t heard about events, information, or developments that could improve your life. In a sense, FOMO is directly associated with a fear of regret and concerns about missing opportunities, unique experiences, or anything else that could be classified as memorable, profitable, or wholesome overall. If you’ve experienced FOMO, then you know that one of the most common behavioral symptoms is the need to constantly keep up with what everyone else is doing.
Being under the incessant influence of this phenomenon is directly correlated with lower mood, decreased life satisfaction, and self-esteem. Being aware of all these aspects can make you feel like you’re relatively safe from the influence of FOMO, but the truth is that you can be affected without even realizing it. You’ll see a coin pumping or notice that a well-known investor is making choices that are different from yours, and you might instantly start to question your own strategy. However, by the time you enter the market, it might be too late, and you’ll end up buying at the top instead.
It is difficult, but you must always stick to your strategy. Avoid chasing prices, but if you do, remember to learn from your mistakes and become committed to doing better in the future instead of beating yourself up. There will always be other opportunities in this ecosystem, as the market is cyclical, and trends change constantly.
Accept the losses
This is a topic that most investors have trouble reconciling with. The newcomers, in particular, tend to struggle with this concept as they believe that success means consistent gains with absolutely no losses. This is, naturally, not a realistic way to approach the market. Even veteran investors, who are well accustomed to the intricacies of the marketplaces, deal with losses. That is the fundamental nature of the trading world, and if you don’t accept it, you will never have a good view of your performance and what areas you should improve.
You must be aware that no investor can possibly win every single trade. Losses are part of the game as well, and you mustn’t panic when you face them. Don’t make any sudden movements either, as they’re more likely to make things worse instead of improving them. For example, some sell too early or engage in revenge trading after seeing red, as they believe they can recapture some of the capital they lost. Instead, they end up acquiring even bigger losses.
To avoid this pitfall, make management part of your larger strategy as well. Don’t trade more than you can afford to lose, and implement stop losses to safeguard your money. After the initial shock has dissipated, try to avoid becoming too emotional about a bad trade. Instead, analyze what went wrong and learn from it to avoid making the same mistakes in the future.
Avoid greed
Greed is one of the leading emotions associated with crypto trading. It typically occurs when you trade in profit, but instead of taking the gains, you decide to go higher. Then, the price ends up crashing, and your earnings melt into nothing. Greed makes you hold on much longer than you should, which is precisely how most traders end up losing quite a lot of money. Setting clear and pragmatic take-profit levels and sticking to them as much as possible is the only way to avoid this.
At times, it will be a much better idea to step away from the marketplace instead of allowing yourself to be influenced to make a poor decision. The crypto market is open 24/7 and will always be there when you return. Watching it constantly leads to overtrading and can become obsessive, meaning that you will end up dealing with burnout.
Trading is no longer the domain of a few and far between investors, as more and more people are looking to create their own investment portfolios. If you want to ensure yours is successful as well, remember to assess your goals and develop a strategy that can help you succeed.
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