10 Ways Crypto Traders Can Take Care Of Their Mental Health

For better or worse, the crypto space has a reputation for extreme swings in value. Especially at the beginning, the value of a digital asset may rise or fall by double digits in a single day. The latest bear market seems to be following this pattern.

The unpredictability of digital assets can be bad for investors' physical and mental health, even though big price changes can be a chance to make money (if you're lucky).

The significance of a person's mental health has only recently begun to be recognised in public debate and the media. The state of one's finances and investment portfolio may have a significant impact on one's emotional health, and frequent sadness because of the fluctuation of the cryptocurrency industry can be detrimental.

If you're a crypto trader, we hope you'll read this post since it outlines the finest practises for keeping your mental health in check. Carry on reading!

 

The 10 Keys to Maintaining Your Mental Health Through the Crypto Industry

Here are a few tips to keep your mind in tip-top shape over the coming crypto winter:

 

Put Down the Crypto and Relax

Breaking away from cryptocurrency for a while might help you forget about your losses and the bad market circumstances. To keep your head from spinning, you may need to focus on anything else for a while.

You may improve yourself, give yourself a break, or spend more time with your pals. It's also a good idea to turn off any cryptocurrency-related alerts and delete any associated apps while you're away. Why waste time in the market if you know your efforts won't improve the issue as a whole?

Put More Emphasis On Process Objectives Than On Financial Results.

Traders often put undue stress on themselves by setting lofty financial objectives that they're unlikely to reach. Focusing on the steps involved in trading, such as adhering to your trade strategy and minimising losses using stops, is more likely to lead to success. Thinking along the lines of "if I trade the proper way, the gains will arrive" might be helpful. This will help if you were putting undue pressure on yourself to succeed due to financial concerns.

Be Calm

It's important to remember that major bear markets have come and gone in the past and that cryptocurrency values have fluctuated widely.

 Even though prices have gone up and down, the crypto industry has continued to grow, with new players and projects joining the scene all the time.

Practices In The Mind

The use of mental rehearsals may help make potentially dangerous circumstances seem more comfortable. This is the best way to boost your mental wellness and overall productivity. You can better handle difficult situations if you picture yourself in their shoes ahead of time, both mentally and physically. The point is to put yourself in challenging situations, like waiting on a winning or losing transaction, until your reaction to them becomes habitual.

Fixing In Our Minds' Eyes

Try as much as possible to associate mental rehearsals with certain mental states. You can connect your mental state with your coping reaction by learning to put yourself in a state of calm and attention and then constantly practising coping methods for hazardous circumstances. Then, when a stressful circumstance arises, all you have to do is call on the practised state of mind, and the coping behaviours will kick in automatically. For instance, if you mentally practise a method for hanging onto winning trades while preserving calm concentration, you'll find it simpler to handle the circumstance while maintaining mental calm the next time you encounter a winning trade.

Consider The Long Term Effects 

When you're on the losing end of a trade, it's easy to get caught up in the emotions of the situation and forget that trading is a marathon, not a sprint. Spot traders who purchased Bitcoin at its high in 2017 were stuck with their investment until the market returned to that price in 2020. In the end, only the most patient and knowledgeable investors saw any kind of return on their investments.

Many investors, unaware of the implications, attempt revenge trades. When a trader takes a big loss, their natural reaction is to try to get even by engaging in revenge trading. After suffering a large loss or a string of losses, the act prompts them to try to earn a rapid profit.

The Art Of Risk Management

Reduce your exposure to danger gradually. Risk amplifies the mental impact of a circumstance, raising the stakes in terms of both performance and mental health. When traders attempt to rapidly expand their risk exposure, they may discover that a transaction that was successful with little risk and a single contract is no longer profitable with a larger risk and ten contracts. Trading on a smaller scale at first might be easier on your psyche than making a sudden, large jump into trading on a larger scale when you might not be mentally prepared for it.

Mindful Checklist

Before you invest a dime, go through a mental checklist. Reducing perfectionist standards at the start of every trading day is one strategy for reducing performance requirements. It's time to pause whenever the word "should" enters your mind. Goals like "earning a specific amount of money," "trading with a certain frequency," "making back money that has been lost," etc., fall under the "shoulds" umbrella. Since unrealistic expectations are a common source of performance anxiety, establishing acceptable trading objectives for the day may go a long way toward relieving performance stress and enhancing mental health.

Gain New Market Knowledge

A large number of individuals entered the cryptocurrency market during the subsequent bull run that began in 2020. Because of how long the bull run went, most early crypto investors would have made a profit. Most people in this group didn't take the time to learn about cryptocurrencies before investing in a few popular tokens because they figured they'd receive a decent return if they did. 

The potential for improvement and expansion exists throughout this time of year. Anyone can discover more alternative methods to profit from the cryptocurrency market through tools like Bitcoin bot. For example, you might trade employing short-term tactics like scalping or everlasting futures markets, both of which could be less susceptible to the impacts of the cyber rainy season.

Live Your Life

Focus on things other than trading and have fun. When something is crucial to success, the pressure to succeed increases dramatically. Traders who have few outside interests are more likely to suffer from performance anxiety and mental health problems. If you put all of your faith into investing and things don't turn out well, it might seem like the end of the universe. You can protect your self-confidence and mental health from setbacks in trading by spreading your hopes and dreams across multiple areas of your life.

 

The Verdict

Many traders who believe they have serious mental health issues are stuck in an unhealthy cycle of striving for perfection. This kind of self-imposed pressure may easily induce anxiety and, in turn, reduce productivity. The toll on your psyche can be high, and you may start to wonder if you'll ever make it if you keep feeling this way. Traders' mental health and trading performance may be vastly improved in remarkably little time if they focus on the root of the issue (i.e., the high standards that cause them to feel stress in the initial instance).

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Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.