How to use commercial psychology to avoid losses in the cryptocurrency trade
The world of cryptocurrency trade is becoming increasingly popular, especially among retail traders who want to enter the revolution of the digital currency. However, with great potential, there is a great risk, and many traders are trying to orient themselves in the complex world of crypto market without losing their capital Won with so much effort.
The key strategy to avoid losses in the cryptomen trade is the incorporation of commercial psychology into its approach. Although no commercial system can guarantee success, understand how to apply psychological principles, it can help you take more informed decisions and reduce risk.
What are commercial psychologies?
Commercial psychologies relate to cognitive bias, emotions and habits that affect the trader’s decision -making process. These prejudices can lead operators to irrational or impulsive decisions, resulting in significant losses. Some common commercial psychologies include:
* Confirmation of bias : The tendency to focus on information that confirms the already existing views on one, ignoring contradictory evidence.
* Aversion to Loss : Fear of loss more than potential profit of trade that leads traders to respond from exaggerated when their positions are at risk.
* Fomo (fear of loss) : Psychological pressure to invest before others do, leading to impulsive and poorly informed decisions.
How commercial psychology can help you avoid losses
To avoid losses in the cryptom trade, you need to understand how your mind is connected. Here are some tips on how to apply commercial psychology to reduce risk:
- This will help you stay centered and prevent it from spreading.
- Use the arrest of the loss : Determine the order orders to limit your potential loss if the exchange is against you. This is particularly important in cryptom markets where prices can fluctuate quickly.
- Monitor emotions : Recognize how emotions such as emotions, fear or greed affect their decisions. Take breaks from the store when emotions work and focus on rational decision making.
- Diversify your portfolio : Extend your investments to different types of assets to minimize the risk and reduce dependence on any currency or market.
- Do not follow the trends : resist the purchase or sale pulse only based on the market feeling. Instead, wait for the basic analysis and technical indicators to confirm the possible price movements.
- Stay disciplined : Singing your negotiating plan and avoid imprisonment in a hot or cold shop. A fixed commercial strategy can help you maintain a constant relationship between risk.
- This will help improve your approach and adapt to changing market conditions.
Case Studies: How commercial psychology works in markets with cryptomes
To illustrate the importance of commercial psychology in the crypto markets, consider some case studies:
* Bitcoin vs. Ethereum (2017)
: During this period, Bitcoin has experienced considerable pricing volatility due to increasing speculation and exaggeration around other cryptocurrencies such as Ethereum. Many merchants bought bitcoin depending on the feeling instead of technical analysis or basic value.
* Curls vs. Stellar (2020) : In 2020, the price of the ripple collapsed against its rival, star. Several traders have undergone excessive risks when buying a ripple at extremely high prices just to sell when the price dropped. This behavior has led to significant losses for these merchants.