Whether we want to admit it or not, we all have experienced both earning and losing money or even breaking even when it comes to our crypto investments. But what's interesting about this is not just things stop here, is how we are reacting from this point on. In case we spot a super high risk IPO in the crypto space or a token that is shilled hard, but hasn't yet reached its peak point - we might react differently based on our previous experiences. In case we have good earnings, I would assume we would be less inclined to jump from the airplane without a parachute. If we have broken even previously, the probability is also low as we were on the edge of losing while we succeeded to keep in the end a positive balance (and yes, 0 is still a positive number based on my last checks 😀). But when it comes to having previously lost (almost) everything - and here I admit I speak also from experience - we tend to take even higher risks.
Get back in the black quick scheme
Taking reckless high risk positions in the crypto market just to get back in the black is simply to give in to our emotions. The rational thinking vanishes away and we only see the prize at the end of the rainbow, even if in reality we are living a fantasy. But that's how the psychology works in this case and until we admit it and put some sorts of ways to deal with it, that will always happen again and again. And this doesn't apply only in investments where money is involved, it can happen in the same way also in real life. And in those cases things get take bigger proportions with irreversible consequences as some things you simply cannot get them back.
Get rich quick scheme doesn't work either
I’ve seen it and experienced myself over and over again the mirage of chasing the next big thing, hoping to turn a small investment into a fortune overnight. The problem is that these schemes usually benefit the early insiders, while the rest of us get left holding the bag. If making money in crypto was that easy, everyone would be rich by now, but reality proves otherwise. To alleviate this, I think it is up to us to do DYOR and invest just in things that bring utility and value. This way at least if something goes wrong, our thinking was good which should keep us sane.
Endless winning streaks are a myth
Whether we want to recognize it or not, no one, and I mean no one, wins all the time, no matter how good they think they are. Even the best traders and investors take losses, but what separates them from the rest is how they manage those losses. Believing you're invincible after a few good calls can lead to reckless decisions, and sooner or later, the market humbles everyone. Many times when I winning I would invest with less and less care and analysis and at some point I would lose and had to retrace that in order to get back my investments. But if I was paying attention in the first time, my portfolio would have kept on rising steadily.
Understanding ourselves and how we reach in different situations when investing in crypto or other financial domains, is just as important as understanding the market itself. Whether we win, break even, or lose, how we react will shape our future decisions and ultimately determine our success. The key is to stay rational, avoid emotional decisions, and always remember that patience and strategy beat impulsiveness every single time. There are times when we might fall into temptations, we might do wrong things or simply have bad luck, but our reactions are what makes us successful or not in the end. We need to work on ourselves - I even realize that - and I hope we can make it or at least get better at it.
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Very nice post
You know what is hard for me is to keep going despite what is happening, to keep going and to keep my composure so that I can do my work while losing .
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Indeed. Even the best in the business actually incurs some losses one way or another. I think some people will eventually continue to chase the get rich quick schemes, example is how memes are doing daily volumes and real projects aren't currently doing much
There is a good book: Trading Psychology by Norman Welz
But I think it is only available in german. 😏
https://peakd.com/hive-167922/@blkchn/buchtipp-trading-psychologie-book-tip-trading-psychology