The Psychology of a Successful Crypto Trader: Habits You Need

Ever wondered why some traders spend hours doing technical and fundamental analysis, yet they still don’t make it big? Most of the time, they end up losing money. The reason this happens is simple: trading cryptocurrencies isn’t just about reading charts; it’s also about managing your emotions. 

So, in this article, we’ll be looking at what trading psychology is and how successful traders can use their emotions effectively. Later, we’ll look into AlgosOne, a trade automation bot that trades on autopilot, ultimately removing human emotions and giving risk-free returns to its users. 

What is Trading Psychology?

Trading psychology refers to the mental and emotional aspects that influence how crypto traders make decisions. It examines a trader’s thoughts, behaviors, and biases not only when they’re interacting with the market but also outside of it. 

The field also examines why a trader closes winning positions prematurely or freezes up. 

What Behavioral Biases and Emotions do Traders Experience?

Here are the common behavioral biases and emotions a trader faces: 

1. Fear Of Missing Out (FOMO)

Traders often make trades based on the potential profits they are missing. They buy the hype and end up exposing themselves to scams. 

2. Fear, Uncertainty, and Doubt (FUD)

Negative news or market uncertainty often pushes traders to either panic sell or avoid entering the market altogether, leading them to miss out on potential opportunities. 

3. Impulsive Decision

Traders sometimes let their emotions take the driving seat and make unplanned decisions without doing proper research or following their strategies. This usually happens when traders have made multiple successful trades in the past – they feel overconfident and believe the market will always move in their favor. 

4. Loss Aversion

They hold onto losing positions for far too long, fearing further losses. By not taking necessary risks, the opposite happens, and traders end up losing more than they anticipated. 

How to Enhance Your Trading Decisions Using Trading Psychology?

Here’s how successful crypto traders use trading psychology to win in the market: 

1. Understand the Game

Successful crypto traders understand that the market is not only a game of numbers and trends. It’s equally a game of human psychology, as it’s the main factor that determines the market’s next direction and how they react to it emotionally. 

By understanding human psychology, they’re able to better equip themselves with how to control their emotion in the face of uncertainty. 

2. Utilize Automated Tools

In the era of Artificial Intelligence, big corporations like Google and Microsoft are leveraging AI to boost employee productivity. Likewise, successful traders are using automated trading tools to increase their success ratio and improve decision-making. 

3. Set Clear Trading Rules

Successful traders have established trading rules that help them to remain disciplined. They do not overtrade, nor do they trade without a risk-management strategy. A common rule that most successful crypto traders use is not trading & risking more than 3% in a single day. 

4. Develop a Trading Plan

Having a comprehensive trading plan allows traders to outline their goals, risk tolerance, and strategy. A well-structured plan is the “why” for most successful traders, serving as a roadmap that helps them understand why and for what they’re trading in the first place. 

Are they trading for early retirement or a passive income? A clear roadmap helps traders to remain focused on their plans. 

Is Trading 70% Psychology?

Yes, trading is often considered to be 70% psychology. Only about 30% of trading is based on a strategy that traders build and refine over time. However, even with a time-tested trading strategy, if your mind breaks under intense pressure, that strategy will be almost worthless. 

Therefore, to be successful in trading, you need to let go of FOMO, FUD, and greed. Instead, you need to develop habits and a realistic growth plan. 

Why Do 99% Fail in Trading?

Although the figure of 99% is disputed, a large number of traders indeed end up losing money, rather than making profits. The reason why this happens is as follows: 

1. Lack of Training

Most retail traders enter the market without any substantial knowledge or experience. They do not understand market dynamics or trading strategies. 

2. Lack of Practice

Many traders do not practice or backtest their strategies. They enter the market thinking profits will come in just a matter of clicks. 

3. They Bet Instead of Trade

Lastly, many traders bet on the market. They don’t make calculated approaches based on careful analysis and risk management. They also don’t learn from their mistakes or successes. 

Why Are Successful Traders Using AlgosOne?

However, due to the nature of the crypto market, success is still not guaranteed. By developing healthy trading habits, you’re able to minimize the risk, but despite it, you can still incur irreversible losses. With the help of AlgosOne, everything changes! 

AlgosOne is an AI-powered trade automation bot that executes trades automatically without human intervention. Its combination of machine learning, real-time adaptability, human expertise, and emotionless trade execution gives it a massive edge.

Here’s how AlgosOne lets you win the market. 

1. Removal of Human Emotions

On AlgosOne, the trading bot trades on the user’s behalf, not the user. To achieve this, AlgosOne processes millions of data points in real time and decides where to invest or exit based on price history, news sentiment, halving events, market sentiment, and social media trends.

By removing human emotions from the equation, AlgosOne can trade solely based on data and market sentiment. It’s not trading due to FOMO or FUD, nor is it engaging in revenge trading or overprotecting users’ capital from risk. 

2. Trading Plan for Every Trader

Unlike manual trading, traders on AlgosOne adjust their risk level depending on their trading goals. Traders with a higher risk appetite can opt for high-risk trade settings, whereas users seeking long-term investments have the freedom to select low-risk trade settings. This tailored approach has been termed successful by many users. 

3. Risk Management

AlgosOne guarantees your profits are secured. Its risk management strategy includes automated stop-loss and take-profit orders. It also ensures that no more than 10% of a user’s capital is used on a single trade, thereby preventing the liquidation of the user’s capital. 

Moreover, AlgosOne also has a unique reserve fund of more than 110 million dollars that acts as insurance to protect user funds in the event of technical failure.

Conclusion

Apart from technical or fundamental analysis, a more often overlooked skill a trader must have is habits that help them to avoid unnecessary risks. However, in the volatile crypto space, success is still not guaranteed unless you use tools like AlgosOne, which help to automate the entire trading process. Giving you high returns without any risk. 

You can also leverage AI to grow your portfolio by signing up for AlgosOne today!