Truth is often bitter and hard to take, but it’s something that we absolutely must accept if we’re going to expand and learn, especially when we’re picking up the pieces of previous mistakes. Solopreneurs and day traders can get into a lot of trouble without the support of trusted associates who are traveling over the same trading hurdles. And that’s why Crypto Trader News exists! Because sometimes hard truths are easier to take from a trusted friend than self-flagellation and going alone.
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Here’s the thing: You will fail before you succeed, that’s almost guaranteed.
Truth, as hard as it might be to hear, can also be liberating if you are honest about what ails you (and your trading portfolio), and also if you are giving the source of those issues a hard, objective look.
You might be wondering how this applies to crypto trading. Hang tight. We’re getting to the point which is, if your trades are consistently failing, YOU might be the problem.
Sorry, not sorry.
If you haven’t left already then there’s hope for you still, so let’s get into some of the crypto trading truths so you can climb your way to success.
Hard truth #1: Being an overnight success is a myth
Just because you did your research and opened a trade account on a crypto exchange, and you’re hot to trot about trading doesn’t make you a good trader. Immediate profits are almost unheard of unless you have the Midas touch, a crystal ball that can see into the future, and timing more accurate than a Swiss watch.
You think there’s a timetable for a volatile market? [Insert laughter here.]
Trading is not a sprint, it’s a marathon. Anything worthy is worth your time, energy and attention. Traders often fail before they succeed because there’s often a steep learning curve. Let me give you an analogy.
You’ve never gone skiing before but you find yourself on a lift taking you up the mountain. Maybe you fall off the lift, but you don’t quit. Now you’re looking at the trail maps but you don’t understand what the different labels mean. Do you go for the green circle or the double black diamond trail?
Well, that double black diamond sure would put a feather in your cap if you make it down the mountain alive, but chances are that ski patrol will be scraping you off a tree.
Same thing with trading. You can’t go all double black diamond when you’re starting out! Those practice trades with pretend money are great for getting used to the tools, but the mindset and aggressive style you’re playing with often doesn’t pan out in the live version.
Don’t get me wrong. Time and experience is not the cure to losing either, but with time and experience comes the wisdom to pivot or get out before the trades get really bad.
Hard truth #2: You’re gonna lose
Remember that Tom Hanks movie, A League of their Own, where the annoying kid always said, “You’re gonna lose. You’re gonna lose.”
There’s a certain amount of truth in that so it’s best to be smart about your money and how you’re investing it. One of the most important rules is to never trade with money that you cannot afford to lose. Full stop.
Just don’t do it. Why? Because if you’re hedging your mortgage money on a “sure thing” then you are most likely in a desperate situation and not in the right mindset to be trading responsibly.
Hope doesn’t pay the bills. Consider a smart trading strategy that keeps in mind the risk-to-reward ratio and what percentage of your liquid funds can be traded without losing your shirt.
Hard truth #3: Stay humble, my friend
Multiple wins and a fat portfolio is no reason to have a big head about it. Finding comfortability in those wins could lead you to be more aggressive in your trading.
This is not to say that you shouldn’t be aggressive. It all depends on your risk factors, confidence, and what the market analysis is providing. Sore winners might be just as bad as sore winners because flaunting the wins will only give you a false sense of security and probably anger a few of your peers. And when the downfall happens, and it usually does, you’re the one eating humble pie.
Bottom line, big gains can mean you’re just as lucky as you are good. Does that qualify you to play with the big boys? Maybe.
In a nutshell, success isn’t necessarily measured by how much money you make in a single trade, but rather how much money you keep and how your entire portfolio grows. Trading is about being consistent. Success is when you can maintain a level of consistency and growth in your profit over a long stretch of time.
Hard truth #4: You might be a plodder instead of a pro
Plodders are kind of lazy and inattentive. They’re happy with the status quo. They’re okay with little wins here and there.
And why is that okay?
Because they don’t take trading seriously. These are the people who have the intellectual skills to apply themselves but choose not to. Hey, that’s on them, right?
I happen to think that’s lazy. If you’re taking the time to use the tools, why not take the time to really understand what they’re for and how to best leverage them to your advantage?
Pros put in the time. They study, analyze, stay consistent, and win. Your time is money. Putting time into your crypto trading strategy can earn more money. Think about it.
Hard truth #5: Look in the mirror
Well, not literally look in the mirror, but definitely do some soul searching and figure out if you have the personality and temperament to be a good trader.
I’m not saying you have to be a Type A or B personality. I’m just saying that we all have traits that make us human and they’re not always good.
Do you have the capacity to stop and reassess or do you charge headlong into things, damn the consequences. If you have boarish tendencies, can you put a leash on it long enough to take an objective look at the market analysis?
When you really start getting serious about trading, you might find yourself financially and emotionally invested. Don’t fall in love with the items in your portfolio. It does not love you back. You have to be okay with that.
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