Cultivating the psychology of a smart trader as Bitcoin breaks new highs for the year over $9000

I doubt there is anyone in the cryptocurrency sphere that is not amazed by the current Bitcoin blastoff in price. It's like the Full Moon is the destination the way price action is climbing still further in this parabolic move that looks like it will go on forever.

Never before in my experience, which is admittedly limited to about 18 months in the crypto scene, have I seen such an enthusiastic bull run. Since April 2 Bitcoin has been climbing and made new yearly highs around $9300 this weekend. Usually volume drops on the weekends and price can get up to more volatile behaviour, and it certainly did this weekend, but where’s the retrace? Even within this recent uptrend, we have had at least two noticeable retracements in price of around 20%, so volatility is there, and will continue.

The weekend is gone, Monday is here and almost over, yet Bitcoin continues to hold its value, way up at the new highs for the past 12 months in fact. This is truly momentous, but even experienced traders never expected so much bullish momentum or price action. Even technical indicators could never point to so much profit to be made over these past three months.

If you had just held your Bitcoin, and not day traded in and out of altcoins to attempt to increase your stablecoin or Bitcoin holdings, you would have made massive gains. And any intelligent crypto trader will have two sets of crytpo – one for long term “hodl” and one for trading. The long term hodl can sit there for the next two more years at least so that it can benefit from the long bull run that has just started and can grow in value until its next peak, wherever that may be. Estimates are varied but accuracy can be obtained by looking at past bull runs over the years and seeing the pattern.

And then just sell out when you need the money in a few years and be content. The practice of day trading a section of one’s Bitcoin or altcoin holdings is riskier but can lead to more profit, as one makes small gains on a daily basis. The truth is that not even expert traders can perfectly time the tops and bottoms. They are as hard to catch as the wind, but we can catch a chunk of each move and take profit. And that is the strategy to cultivate.

Every trader should have a strategy and stick to it, otherwise the mind can play tricks on us in times of pressure, stress, excitement, fomo or fud. A strategy is to be worked on in the clear light of day, with a cool head after serious scrutiny of the market conditions. And then one sticks to it because you know it works and is the intelligent thing to do.

Market volatility can make one want to make impulsive or instinctive choices when trading, and sometimes a single mistake can be costly. That’s why the basics need to be in place from the start. I may be tempted to use some of my long term holdings to beat the market by buying and selling but what if I miss the move and get left out on the sidelines as Bitcoin goes to the Moon?

That’s why we clearly set out from the start which Bitcoin we will hodl and which we are willing to risk in the volatile art and science of day trading or swing trading. Those kind of decisions are the beginning of the traders strategy. After that there can be more details, or tactics to refine the overall strategy, but the battle is not just with the volatile Bitcoin price action. It is also with ones’ own mind and impulses, like fear and greed, hankering and lamentation.

Half the skill in trading crypto or any asset like Forex, is to master the psychology of trading, to harness the mind, remove the emotions and stick to the plan. You learn in the beginning from a few expensive mistakes and quickly the strategy forms based on those past mistakes, and it is refined daily with new data and information as well as new experience. Keep learning, there is always more to know.

There is noting better than actually having some of your own money invested in the market to really give you a feel for what it’s like to watch the potential profits pass by your vision like waves of opportunity. Like a surfer waiting for just the right wave, we sit it alert readiness to pull the trigger. Or we do a thorough technical analysis and we make our position clear, stating entry based on conditions as well as our take profit exit point, regardless of the fact that there could be a massive move that we miss.

It’s all about catching the bulk of the move in price and not lamenting for the extra that we missed. If we live in lamentation we will cause our own suffering, like a lover whose love is not reciprocated and who then falls into a melancholy based on sentimental illusions of what was or could have been. This is all a waste of energy in the end because potentially any or every other day there will be massive moves in price that we miss. Especially now in Bitcoin’s current parabolic move upward.

Never be put off by what you missed but be content with the profit you did lock in today, the few percent that all add up day by day. The main thing before accumulation of wealth is preservation of what you already have and so the risk:reward ratio has to be in your favor at all times in every trade. And for that to occur the parameters under which we enter a trade and the procedures we follow to protect ourselves from the trade going wrong are more important in the long run than leaving oneself too exposed to a reversal to the downside and a loss of one’s assets.

So ideally just buy and hodl, buy more during the dips each time, accumulate, dollar cost average, buy in bit more to add to your stack every month if you can, and just keep slowly accumulating over the months regardless of the price. This is a long term strategy which is safe and guaranteed to preserve your investment money and bring you profit during the bull run over the next two years. Then time your exit at the end as well as you can and remember not to lament if price goes higher and you have sold. Price will always be going higher – even to $1 million one day potentially for one Bitcoin, who knows? So enjoy the profit you do have and leave it at that. Hankering and lamenting are for fools and lovers who are moonstruck and not thinking logically.

And Bitcoin is about money and money is not going to be made based on sentiment when trading or investing but on fundamentals and technicals, so keep a cool head and don’t let the allure of wealth eat away at the other treasures of life that you have, like time, health, family and relationships. Money is only one department, an important one but not worth losing the other valuable ones for. Keep the balance and allow time to be your ally, for time and patience, according to millionaire investor Warren Buffet, is what allows money to flow from the impatient to the patient. Watch and learn and it will all fall into place one percent at a time.