It is a well-known and widely established fact that when it comes to taking business decisions, you should always leave your emotions at the door. Yet, when it comes to trading cryptocurrencies, it seems people don’t think twice before they act.
While there are exceptions to the aforementioned rule – such as how your business decisions can affect the wellbeing of a larger community when you are in higher impact making roles… at the micro level, when you are making business decisions such as trading cryptocurrencies that influence and affect only yourself and your immediate surroundings, you really need to practice what is advised above.
We know that this is not a self-help site and you are not here to learn The Secret, but a few observations in regards to trading cryptocurrencies over the past few days merited the creation of this post.
Cryptocurrency trading and emotions – a dangerous combination
With the recent drop in the value of cryptocurrencies reportedly led by the statement of the U.S. Securities and Exchange Commission (SEC), a few actions across various cryptocurrency traders were observed by many.
It seemed that the traders and individual investors who bought Bitcoin during its prime in December 2017 – by being euphoric and enticed by its rise – were now selling it when it had dropped to one of its all-time lows over the past couple of months.
That alluded towards the possibility that the decision was taken more out of an emotional response: a fear of losing everything, causing them to sell the expensive asset for a mere fraction of its prior value.
It was a prime example of emotions getting into the way of business acumen. These people did not only make an emotional decision in December with the fear of missing out (FOMO) by purchasing Bitcoin at its highest ever values, but were now making an emotional decision of selling it at one of its all-time lows, influenced by fear, uncertainty and doubt (FUD).
When one of them was asked about what drove her to do so, we got the same answer as we had assumed.
“I purchased Bitcoin to profit from it when I knew nothing about, but I only lost my money. I’m selling at a loss to recover something now.” A woman said.
Similar accounts were recorded by other people that we could connect with, but who chose to remain anonymous.
This just led towards the creation of this simple post, to tell people not to let emotions cloud their judgement.
If you are not aware of the risks that you are getting yourself into by purchasing a volatile asset, take your time to consider them before you make any decisions. Make assessments to see which cryptocurrency is good to purchase through analytical reviews, not because everyone is telling you buy it. When the value drops, do not part with it immediately out of fear. Instead, try holding on to it. Sometimes, the coin might drop to nothing before it rises in value again, and if you are patient, you can actually make off with profit, rather than just scraps of your original investment.
Emotions, while a big part of being human, are bound to cloud your judgement in times of high volatility.
Do not let that happen with your money. Be vigilant and diligent, and make decisions with your analytical mind, not with your emotional, heart.