1. You’re Too Scared to Buy the Bitcoin Bottom
Bottom-picking is one of the most profitable plays you can make in trading cryptocurrencies. It’s also one of the most difficult times to pull the trigger. First, the bleeding stops. After a downtrend lasts for months or even years, suddenly the asset ceases falling below a certain price level. For bitcoin, that price was $3,000 during the crypto winter last year. Second, the asset begins trading at a certain price range for an extended period of time. In bitcoin’s case, that was between $3,000 and $4,000. The signs were there. All you needed to do was hit the “buy” button, and you’d be up 300 percent today. But you were too scared to pull the trigger.
2. You’re Allowing Your Emotions to Run Wild
In trading and investing, emotions are expensive. Any form of emotion, such as fear or euphoria, can cost you money. In a bull market, people should be printing cash while they sleep. However, fear prevents many from entering the market at opportune moments, especially during pullbacks. As a result, they get left behind when the asset resumes its uptrend. If the market is in an uptrend, every correction is a chance to buy cheap. You don’t have to be an expert to know that. Unfortunately, emotions take precedence for many people, especially in volatile markets like crypto.
3. You Refuse to Adapt to Changing Market Conditions
Persistence is the key to success in many fields, but not in trading. Traders must be ultra-flexible. They have to be able to switch their bias based on the information given to them by the market. Unfortunately, many traders struggle to shake a specific image in their mind. They hold on to that image even though the market is telling them to let go. Consequently, they suffer tremendous losses. Analyst Bitcoin Macro encapsulates this pitfall in one of his recent tweets.
4. You Trade for the Sake of Trading
Legendary trader Jesse Livermore once said: “The money is made by sitting, not trading.” All successful traders know this by heart. You either wait for the perfect setups, or you follow the trend. You don’t sweat the daily fluctuations when your chances of success are high. However, most traders do the exact opposite. They chase almost every opportunity in their hunger for profits. Precious mental energy is wasted, and stress builds up. As a result, these traders can’t execute the proper trade when the right situation arises. From experience, I can say that sitting on your trades is one of the easiest ways to supercharge your net worth. Trading can be a difficult game to play, and many tend to quit. However, if you avoid the pitfalls presented by Bitcoin Macro, your winning probability will tremendously improve when trading crypto and other assets.
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