One of the reasons why people don’t want to get involved in crypto trading is the extreme volatility of this market. Prices can both skyrocket and drop to zero in a matter of weeks.
And one of the biggest mistakes people make is their inability to stay calm during these market spikes. People can’t just stay on one course and like to change hearts when it’s not the right time.
The most prominent crypto investors that have been successful in this niche are patient and smart. If your research and analysis show that markets are profitable and are projected to rise, don’t get discouraged after a small decline; conversely, if your analysis signals a bearish trend, don’t get panicked or scared if prices suddenly spike.
Choosing the exact time to enter or exit the market is not only impossible but is a huge factor in why people cannot remain patient. When their portfolio is not making consistent profits, they feel the need to act, but sometimes the best action is to do nothing at all.
Let’s look closely at numerous reasons why patience can define your success.
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Invest following your gut feeling
The level of greed in this space is incomparable to anything we’ve seen before. People invest in some obscure NFTs, meme coins, and useless tokens in hopes of becoming millionaires overnight. While there’s no harm in dreaming, it’s a dangerous trap that a vast array of traders fall into.
Whether you have market experience or not, you need to distinguish between gambling and investing. Investing requires a lot of research and due diligence using logic, while gambling requires spontaneous emotional outbursts and delusional thoughts that are often regretted later.
Sticking to the hodling philosophy
The idea of “holding and not selling coins for as long as possible” without taking profits has been built into the foundations of cryptocurrency markets largely by big players, insiders, and institutions.
Why do a lot of exchange owners or some big investors encourage others to buy and hold coins forever? It’s a cut-and-dry concept, and it’s that they want to get ahead of everyone else.
How could they discount their assets if everyone else was doing it too? The hodling philosophy gives them the stability and liquidity they need to sell coins at higher prices.
Hodling is not always a wrong choice. In fact, it’s a really good tactic in the early stages of a bull market. For example, in March 2020, when the price of bitcoin fell below $5000, a lot of people followed the banner of renowned experts and did not sell coins — they anticipated the beginning of an upcoming bull cycle because of the onset of obvious factors.
When prices fall well below their all-time highs and you have good reason to predict a prolonged bull trend, hodling is not a bad idea. Unfortunately, not everyone is mentally strong to weather the storm.
Don’t build castles in the air
It’s not a moment of surprise that a lot of investors are emotionally unstable. They have no investment skills whatsoever, and they can only mislead you, so it’s not a good idea to follow their advice.
Many newcomers to the crypto space will follow the bee-line and get disappointed in the short run. You should stick with those who use logic and reasoning, which can be helpful in trading.
If you can easily convince yourself to buy at a high price and sell at a low price, it is doubtful that you have done any real research on the asset you are trading. Instead, you are too focused on making quick profits, which often leads to quick losses.
People who fully understand what they are investing in are more likely to endure the emotional factors that make investing much more difficult.
Is it challenging to build a win-win strategy in trading?
No, it’s not an Augean task to compose your own strategy that will help you in trading and investing. When working closely on it, you need to follow your own inner voice and expertise.
Why do traders come short and lose money?
To cut it to the chase, there are a plethora of factors that can make a negative impact on traders. Fear, greed, overthinking, and a lot of other factors can take a toll on an investor.
Is “hodling strategy” a real deal?
Usually, this strategy can be successful, however, traders should know that they can’t apply it without being patient.