I first got into the world of trading over a decade ago, spending a couple years immersed in forex studying technicals as well as psychology. It was due to failure in the psychology department that my forex engagement got nulled shortly after beginning trading live.
However years later, lots of what I learned back then looped back around to be of use in the world of crypto. Go figure.
And just as true as it is in the realm of trading forex, stock, futures, or any other asset class, it's equally applicable in the crypto-trading domain: the psychology of trading can be a real bitch sometimes.
Of course, it's an integral part of the game. One of the most challenging - and rewarding.
Keeping one's head straight, emotions chained up, and focused on a systematic approach really is critical.
A solid decision-making process is a priceless asset to have when trading, and it's a tough one to build, as everyone's individual psychology and goals are different. But without a firm decisiveness, clearly-set objectives, and the discipline to follow them, you're bound to cause yourself unnecessary suffering.
*Such was the case - the suffering - last night, as I loosely navigated my way through the question of what to do with the $1309 SBD sitting in my account...
I had been holding them, waiting for SBD price to go back up to around $2. I figured since the market was stupid, overpaying way too much multiple times, it'd probably continue back up that high again sooner or later - so was sitting on it for about a week to sell them on Bittrex/Poloniex.
However, yesterday, I started questioning my strategy.
First, I needed to pull out some profits to pay bills, and didn't really want to touch any of my other tokens. Then, I read a post from @biophil about how he was selling his SBD, sure it'd be going back down towards a dollar. SBD was $1.75 at the time. Had I not been greedy, it probably woulda been wise to sell than.
But, I waited.
And then, that devil of fear set in. Sold at around $1.42.
Now of course, that's technically 42 cents per SBD more than it's "supposed to be" worth. Yet through the filters of undisciplined trading psychology, that was a potential 33 cents (or more) I "lost out on" - equating to $432 - or $571 CAD - a fairly significant sum for having procrastinated a few hours in hopes of making more.
And of course, the back-and-forth mental debate didn't stop there... checking in repeatedly throughout today at to how much higher SBD went... another 10 cents, another $150 CAD "missed"... and then, the headaches of decision in whether to have kept that in ETH and wait for another 10-30% gain, or exchange straight into CAD and pull out...
Chaos.
Why? Lack of systematic decisiveness, clear objectives, and discipline to follow through on the system.
Plain and simple.
Hours of debate and self-induced stress. All that could have been avoided with simple rules put in place.
i.e. I could have established to cash out Steem Dollars as they rolled in, taking whatever amount over the $1 as a bonus, converting directly to fiat as payday while leaving Steem in crypto, or buying other crypto and taking out the profit when hitting a certain objective.
Or, withdraw weekly the amount earned through my curation rewards, irregardless of Steem price, as my payday.
Or, set certain targets at which to sell SBD, taking rent money from another investment that's already produced at least a minimum ROI.
There could have been alot of different options.
But instead, that bitch of trading psychology got the best of me, and time, energy, and money was wasted in procrastination and indecision.
And here, is another key turning psychological point: dwell on losses, or take the gains of lessons learned?
Of course, we're each on our own journeys here in crypto-land, and we're all bound to make less-than-awesome decisions at some point. It's part of the learning process.
However, the moral of this story:
It pays to systemize your trading decisions.
Psychology can work against us very quick when we don't put protocols in place to follow. Much better to reduce stress by establishing your objectives upfront and sticking to them - removing emotion from the picture as much as possible, and not deviating from your original plans and targets.
So... play it smart. Systemize.
And take your losses as tuition, putting the lessons into effect for the next learning cycle...
