2021 has been a wild ride for the cryptocurrency market as Bitcoin shocked its naysayers by setting a new record high at $64,863, and the DeFi and NFT sector made headlines around the world.
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Crypto traders need to be wary of times like these because the notoriously volatile nature of the cryptocurrency market can see vast fortunes wiped out in a matter of hours or days once the trend shifts.
According to Charlie Burton, veteran trader and the co-founder of Ezeetrader, this is when it is important for every trader to have a defined set of rules that they stick to when emotions begin to run hot because “we are all fallible, flawed human beings, especially in front of the markets.”
“We are naturally influenced by greed or fear to one propensity or another. So we absolutely need to have some simple rules, but I would also say a lot of visualization is good.”
These rules may include things like at what percentage loss do investors place a stop loss, the maximum percentage of the portfolio that one will allow to be put on any trade, and having a set sell orders for investments.
“What is important is a lot of self-talk. ‘If I take this trade now, and it doesn’t work out, will I be upset with myself?’ This is a great line to help stop me from jumping into trades that I just shouldn’t be in.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.