Here are some facts and ideas on why most of the traders, even the ones that are highly intellectual, actually fail when trading.
Here are some facts based on statistics. Firstly, only 20 per cent of traders continue to keep on trading after 2 years, and about half of the traders that quit, do so within the first month. Only 7% of people continue trading after the fifth year.
Another strange fact is that traders that have over a decade of trading experience, even if it is a negative record, still continue to do it.
Bear this in mind if you plan on long term trading, because it could take some time until you have a chance to reach a peak in a cryptocurrency trading world, or just understand it for yourself and decide when enough is enough.
So why do people continue to trade even they go into negative values? Most experts say it is because they make up some of their own rules, that actually are not working, but they keep on going with the idea of a perfect trade day in the next trade, which means they just underestimate the complexity of being a trader that actually reaches the peak together with the market’s heights.
All of this continuous trading after failure with plans and situations that they can’t control is often called a 'Random Reinforcement principle'.
It includes an idea or a skill that actually has a negative outcome, and tries to find positive support in negative results, especially in the financial market.
This concept has never been more obvious than in 2017 when the prices rocketed in value, and people claimed that it was their clever trading skills that made the profit.
However, in 2018 the bubble burst and the prices plummeted when many lost most of or even all their money. People did not take into consideration the type of market this is, which is dynamic all of the time, the cryptocurrency market should never be taken for granted.
Part of a good plan is to keep in mind the risks you are taking, and it is recommended to use around 1% per trade, as this minimises the risks, and is a crucial point after a few consecutive negative price changes you may reach during the trades. It is said that only 5% of traders actually make it as traders if you want to become part of it, then a good plan with lots of testing is the key to success together with many other factors that only come with experience.
If you are new to the Cryptocurrency world and would like to open an account we recommend Cex.io.
Also see: Tips To Trade The Volatile Crypto Market
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