Everybody who’s traded for a while knows the dangers in speculative markets. Knowing it however does not mean you will act on your knowledge. I’m new to trading and have been learning very eagerly. I started right into the september’s bear market and took some losses on the way down, but was expecting it and not worried at all. When the markets turned upwards again, I incerased my positions and covered all the losses very fast and kept learning.
I thought I had learned enough already, when the biggest lesson so far was just around the corner. At the end of October, when the VTC & GRS rally started I quickly picked them up, saw the potential and patiently waited for a pullback. I timed VTC quite well and GRS perfectly just at the bottom of the correction.
Then I let my guard down. Instead of maintaining a level head, sticking to my plans and appreciating the huge potential gains that I had, I was overtaken by greed and adrenaline, and listened to all the hype on the social media. I sold at the top but fell hard into the bull trap. Then some disbelief, denial and despair followed. All of these emotions supressed my ability do the right thing and close the trade. In the end I made 100€, but lost plenty in BTC.
What did I learn from it and wrote down for myself?
- Take steps against your own psycholgy.
- If I sell the trade in small parts as the price is going up and the price keeps increasing ridiculously, I will not re-buy it at higher price.
- If something shoots up super quickly, peaks and starts coming down, and I sell it all for whatever emotion, then I will stay out for good. I'll ignore that coin for some time. The correction lasts longer than I'm willing to believe. The small jumps in price are all traps for me. Other traders are humans too and they might take days and weeks to resist, but finally still succumb to the pain and sell their coins. Later there is some fear among the buyers or other things that have already grabbed their attention and the price will stay low for a while.
- If I realise that I'm distracted by gains, high on adrenaline and greed, I will scalp some of it, set good stops and cool my mind. There are no other good decisions I'm able to make in such a state of mind.
The test
My lessons were tested recently during POWR run-up. I bought some, when it came to Bittrex and missed selling the first spike. It came too quickly. When it was going through 4000-3000-4000 I stayed calm and added to my positions. The sentiment on the market was very positive, giving it good probability to reach higher. However my game plan at the time was very cautious and my sell orders were spread between 4000-6000. It made me a good >35% profit, but POWR kept going on upwards.
I re-read what I had written about GRS failure and was happy about what I had secured and not obsessed about the further upside of POWR. Instead, I wrote one more piece, that was missing from the GRS lesson:
- When you have secured 100% of you initial investment, make sure to update your plans. Study the market sentiment, evaluate the events ahead and do it with a clear head. Then decide whether you want to secure profits immediately, gamble some more or take it off the exchange for long term holding.
nice post dude, saw it in crypto-turtle chat :) following and resteemed
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