CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin For Beginners
    • Bitcoin & Crypto Guides 101
  • IEO & ICO List
    • IEO & ICO List
    • Token Sale Evaluations
    • Airdrops
  • Fund
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Bitcoin & Crypto Margin Trading
  • Bitcoin Price Analysis
  • The ICO & IEO List
  • CryptoPotato Crypto Fund
  • Airdrops
  • Ethereum Price Analysis
  • Ripple Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$7,196.11
  • ethereum
    ETH$142.95
  • bitcoin
    BTC$7,196.11-0.52%
  • ethereum
    ETH$142.95-1.43%
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    Mastering the Mind In Crypto Trading: Following The Herd
    Home » Crypto Trader Guides » Mastering the Mind In Crypto Trading: Following The Herd

    Mastering the Mind In Crypto Trading: Following The Herd

    Author: Benjamin Pirus Updated Sep 13, 2018 @ 09:03

    Trading cryptocurrency (or any market for that matter), goes against natural human emotions and psychology. It often takes years to train your body and mind to act in ways that promote profit. Many times, the best move is the one that goes against one’s comfort zone. Whether it’s as an outlier or learning to control emotion, successful trading often requires mastery of the mind.

    It’s been stated that a mere 6% of people make it as professional traders. This is due to many different factors. However, many of these factors often boil down to psychology. One important aspect of trading psychology is “herd mentality”.

    Following the Herd

    Herd mentality is defined as “the tendency for people’s behaviour or beliefs to conform to those of the group to which they belong”. Herd mentality can be seen in many aspects of life. Fads are born because “everyone is doing it”. People want to be involved.

    The same is true of trading in crypto markets. One reason the most recent crypto bull market exploded in such a dramatic fashion, was due to the perpetuation of ideas. People told their friends about crypto, and how it was “the next big thing”, with tales of their profits. This led to classic examples of Fear of Missing out (FOMO).

    sheep-
    The Herd

    This is a fantastic example of herd mentality and a lesson in how to address it. During the recent crypto bull run (November – December 2017), experienced traders probably traded or invested with caution, whereas many other inexperienced people bought what tended to be at the top of the market without calculating or planning their decisions.

    For example, when Bitcoin was at $15 – $19k, human emotion probably led people to feel “safe” about taking trades because “everyone was doing it”, and making a significant profit. However, in this type of scenario, it may be unwise to listen to emotions that tell you to blindly and overconfidently dive into trades without proper risk management. There is something strange about human emotions that lead people to feel much better about decisions when many of their peers are doing the same thing and where they are leading to positive outcomes.

    The above might be an example of euphoria, a stage of investor emotion that “marks the point of maximum financial risk. Having seen every decision result in quick, easy profits, we begin to ignore risk and expect every trade to be profitable”.

    When trading, emotions are powerful, and can sometimes be of good use. But keeping one’s emotions in check and using your established strategy and calculating the upside and downside risk in every situation is essential.

    market cycles

    Click here to start trading on BitMEX exchange and receive 10% discount on fees for 6 months.


    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.


    You might also like:

    66% Of Bitcoin’s Total Hashrate Is Controlled By China: Reuters Reports

    66% Of Bitcoin’s Total Hashrate Is Controlled By China: Reuters Reports

    Tezos Price Analysis: At $1,56 XTZ Is Now The 11th Largest Cryptocurrency

    Tezos Price Analysis: At $1,56 XTZ Is Now The 11th Largest Cryptocurrency

    Mysterious: Roger Ver Interviewing Alleged BitClub Ponzi Scheme’s Joby Weeks

    Mysterious: Roger Ver Interviewing Alleged BitClub Ponzi Scheme’s Joby Weeks

    Bitcoin Struggling At $7200 While Altcoins Recover From Sell-Off: Crypto Market Watch

    Bitcoin Struggling At $7200 While Altcoins Recover From Sell-Off: Crypto Market Watch

    Shark Tank’s Mark Cuban Disses Bitcoin Once Again

    Shark Tank’s Mark Cuban Disses Bitcoin Once Again

    Bitcoin Price Analysis: BTC Is Locked Inside a Bearish Descending Channel, $7000 Next Target?

    Bitcoin Price Analysis: BTC Is Locked Inside a Bearish Descending Channel, $7000 Next Target?

    Deloitte Survey: 83% Of Executives See Compelling Use Cases For Blockchain

    Deloitte Survey: 83% Of Executives See Compelling Use Cases For Blockchain

    MATIC Crashes 70% Overnight Following Panic Selling According to CZ

    MATIC Crashes 70% Overnight Following Panic Selling According to CZ

    Ukraine Set To Legalize Cryptocurrencies As Means Of Payment And Investment

    Ukraine Set To Legalize Cryptocurrencies As Means Of Payment And Investment

    Crypto Community Crowns Tezos (XTZ) As The New ‘Ethereum of 2017’

    Crypto Community Crowns Tezos (XTZ) As The New ‘Ethereum of 2017’

    Ripple Price Analysis: XRP Goes Back Up To $0.23, Can Christmas Come Earlier?

    Ripple Price Analysis: XRP Goes Back Up To $0.23, Can Christmas Come Earlier?

    Bakkt Launches The First CFTC-Regulated Option on Bitcoin And Cash-Settled Futures

    Bakkt Launches The First CFTC-Regulated Option on Bitcoin And Cash-Settled Futures

    Ethereum Price Analysis: ETH Claims $150 But Can It Go Any Higher?

    Ethereum Price Analysis: ETH Claims $150 But Can It Go Any Higher?

    Bitcoin Trading Volume in Argentina Hits New ATH As The President-Elect Announced New Cabinet

    Bitcoin Trading Volume in Argentina Hits New ATH As The President-Elect Announced New Cabinet

    The US IRS Wants To Know How You Got Your Bitcoin

    The US IRS Wants To Know How You Got Your Bitcoin

    Anthony Pompliano: Bitcoin Price At $100,000 By December 2021 (Exclusive Pomp Interview)

    Anthony Pompliano: Bitcoin Price At $100,000 By December 2021 (Exclusive Pomp Interview)

    As New Week Starts, Bitcoin Price Is About To Take a Critical Decision (BTC Analysis & Overview)

    As New Week Starts, Bitcoin Price Is About To Take a Critical Decision (BTC Analysis & Overview)

    What Are Bitcoin Price Gaps? How Can They Affect The Price?

    What Are Bitcoin Price Gaps? How Can They Affect The Price?

    Ethereum’s Istanbul Hard Fork Is Now Live: What to Expect

    Ethereum’s Istanbul Hard Fork Is Now Live: What to Expect

    Bitcoin Price is Likely To Re-Test $4,400 Before Turning Bullish Again, Prominent Analyst Explains

    Bitcoin Price is Likely To Re-Test $4,400 Before Turning Bullish Again, Prominent Analyst Explains


    About The Author

    Benjamin BJ Pirus View more posts by this author

    BJ is a full time writer, editor, and trader in the cryptocurrency space. He has written countless professional articles for numerous news sites such as Forbes, and other interested parties in the crypto space. He is also a trader, staying up to date with the crypto markets constantly, and dabbling in traditional financial market trading occasionally. Contact Ben: LinkedIn

    Comments

    Join Our Community

    • Facebook

    • Twitter

    • YouTube

    • Telegram


    CloudBet
    Bitcoin Editorials

    Anthony Pompliano: Bitcoin Price At $100,000 By December 2021 (Exclusive Pomp Interview)

    Anthony Pompliano: Bitcoin Price At $100,000 By December 2021 (Exclusive Pomp Interview)

    Dec 8, 2019

    What Are Bitcoin Price Gaps? How Can They Affect The Price?

    What Are Bitcoin Price Gaps? How Can They Affect The Price?

    Dec 8, 2019

    Bitcoin Price is Likely To Re-Test $4,400 Before Turning Bullish Again, Prominent Analyst Explains

    Bitcoin Price is Likely To Re-Test $4,400 Before Turning Bullish Again, Prominent Analyst Explains

    Dec 7, 2019

     2 Years Since the Bitcoin Bubble: How Easy is it to Buy Cryptocurrencies Compared to 2017? 

     2 Years Since the Bitcoin Bubble: How Easy is it to Buy Cryptocurrencies Compared to 2017? 

    Nov 20, 2019

    Become a CryptoPotato VIP

    Receive our market updates and crypto trading tips and news by email (We hate spam, and send max of 1 weekly mail):


    Recent Posts
    • 66% Of Bitcoin’s Total Hashrate Is Controlled By China: Reuters Reports

      66% Of Bitcoin’s Total Hashrate Is Controlled By China: Reuters Reports

      Dec 11, 2019
    • Tezos Price Analysis: At $1,56 XTZ Is Now The 11th Largest Cryptocurrency

      Tezos Price Analysis: At $1,56 XTZ Is Now The 11th Largest Cryptocurrency

      Dec 11, 2019
    • Mysterious: Roger Ver Interviewing Alleged BitClub Ponzi Scheme’s Joby Weeks

      Mysterious: Roger Ver Interviewing Alleged BitClub Ponzi Scheme’s Joby Weeks

      Dec 11, 2019
    • Bitcoin Struggling At $7200 While Altcoins Recover From Sell-Off: Crypto Market Watch

      Bitcoin Struggling At $7200 While Altcoins Recover From Sell-Off: Crypto Market Watch

      Dec 11, 2019
    • Shark Tank’s Mark Cuban Disses Bitcoin Once Again

      Shark Tank’s Mark Cuban Disses Bitcoin Once Again

      Dec 10, 2019
    Become a CryptoPotato VIP
    Receive our special crypto tips and news by email: We hate spam, and send max of 1 weekly mail
    About
    Advertise on CryptoPotato
    About Us | Contact Us

    Scholarship
    Cannabis Stock News
    Stock Analysis & Overview
    Terms of service | Privacy Policy | GDPR
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright Cryptopotato Team 2016
    Scroll to top