If you joined crypto in the last 6 months or so, this is a MUST-read if you want to survive.
Even if you mastered FA and TA, you probably still can't find a way to be profitable.
This thread will help you master trading psychology, read on..
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Mental clarity with a trading routine combined with repetition and mental rehearsals will help you overcome psychological issues.
Techniques to increase emotional intelligence and avoid poor discretionary decisions:
A) Trading routine
B) Trading journal
C) Trading plan
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A.1 - Trading Routine
You wouldn't start lifting weights without warming up before so why would you risk getting rekt if you can minimize that risk?
You need a pre-trading routine to put you into »the zone« to avoid any unnecessary discretionary decisions.
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A.2 - Trading Routine
It will help you stay disciplined and avoid any bad habits such as impulse trading.
A routine also sets a level of expectation for the human mind, reaching this level on a daily basis greatly helps with better overall performance.
Yes?
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B.1 - Trading Journal
Imo, the most effective tool, it measures the overall performance and helps you to keep track of thoughts & emotions through a trade.
Over time these notes will show you a behavioral pattern that should be studied and exploited for better performance.
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B.2 - Trading Journal
Cheatsheet of what should be written in your journal
- Feeling toward the trade (hope, fear...)
- Execution process and potential errors, solutions
- Emotional triggers
- Skills acquired from execution of the trade
- Strengths and weaknesses of a trade
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C.1 - Trading Plan
A trading plan should outline what actions to take when pre-defined conditions are met.
Deviating from the plan will yield an emotional decision that is suboptimal even if you close the trade in the green.
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C.2 - Trading Plan
A trading plan needs to define a proper entry/exit criterion with a defined stop loss.
Although your plan shouldn't change daily you must change it according to new market information.
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Binance Buzz fam, that was all.
Share this article to your friends that have started crypto in the last 6 months.
I am dropping more alpha articles and threads soon.