Emotions can be a good thing, right? After all, they’re a key ingredient of being human.
But there’s a downside as well. They can skew our judgement leaving us prone to making decisions we later regret.
Think about this – have you ever been at an auction and felt that rush of adrenaline and pounding heart when you bid on an item?
Perhaps you’ve ended up spending too much and regretting it later. Or maybe you dropped out too soon, worried about how high the price may go.
Either way, if you’d been able to remove emotion from the situation, things may have had a better outcome.
And it’s the same with trading, whether crypto or stocks.
Use limit orders to control your buys/sells
Emotions can take over and lead to poor decisions which ultimately cost you money.
But there’s a simple answer – limit orders.
I guarantee this will help you become a better trader. Why? Because it removes emotion from your decisions.
Put simply, a limit order enables you to buy or sell a crypto (or stock) at a set price.
This means that you’re not sat glued to your trading screen 24/7 waiting for the precise moment to buy or sell.
It’s all done automatically for you. You’ve removed the emotion from your trading.
It’s a discipline that every new trader should learn.
Yes, you might miss out on greater profits at times. But equally you’ll save yourself from many losses by allowing greed or fear to take over.
Reduce your trading fees as a market maker
You can sleep easy knowing that crypto will be sold (or bought) at the price you’ve set, if hits the desired price (A limit order is not guaranteed to execute. If your buy/sell price isn’t reached, the order remains on the book until you cancel it.).
A further advantage is that trading through limit orders will reduce your fees.
Why? Because you become a market maker rather than a market taker, which you are when you place a market order.
Market orders do have a use. It’s the easiest way to trader at it enables you to enter or leave a market a lightning speed.
But I’ll say it again – if you’re serious about become a successful trader you need to strip out the emotion from your decisions.
Adam is the founder of The Crypto Adviser which offers experts guides and reviews on all things related to Bitcoin and cryptocurrency.
Adam is Diploma for Financial Advisers (DipFA) Level 4 qualified, a Member of the London Institute of Banking and Finance (MLIBF), and has worked for many years as a journalist and PR consultant, having studied with the National Council for the Training of Journalists (NCTJ).