Trading in conventional financial markets or cryptocurrency markets, can be a very lucrative career direction for those who take it seriously. However, a great deal of discipline, mastery, and emotional discipline are required to be profitable in professional crypto trading. 

Oftentimes, many traders entertain overtrading. They recklessly enter into too many trades within a given period of time. This often results in unreasonable buying and selling of financial instruments. Some of the factors that can be responsible for this kind of behavior are emotions, impulsive decisions, or a reckless attempt to compensate for losses.

Having too many positions open in a random, uncontrolled technique has pricey effects on many traders. First, it can lead to increased transaction costs, which can eat up your profits and reduce overall returns. Second, overtrading increases the risk of making mistakes, such include entering positions without ethical analysis or failing to stick to a trading plan. Third, overtrading can lead to emotional burnout and stress, leading to degraded decision making and additional losses.

To become a Successful Professional Trader, Take Trading as a Business. 

Professional traders need to approach trading like a business, with a carefully planned strategy and a focus on risk management. And, in the ever-changing crypto trading ecosystem, emotional discipline is key to long-term success. Profitable crypto traders carefully deploy strategies, as would a military General laying siege to a citadel.  

Professional traders know better than anyone that trading is not a get-rich-quick scheme. They recognize that trading is a serious enterprise that requires a combination of skills, experience, discipline, and patience. 

What do Traditional Financial Markets Trader and Professional Crypto Trader Look Like?

There are many similarities between traditional financial market traders and crypto traders. Both types of traders have a deep understanding of market trends and analysis, a well-planned trading strategy, and the ability to make quick decisions under pressure – which comes with years of experience. However, crypto trading presents unique challenges that traditional forex trading does not.

Crypto traders have learned to manage unique challenges due to extreme price volatility and uncertainty of the cryptocurrency market. Professional crypto traders usually handle massive price swings and still remain focused on their long term-strategy. 

In addition, due to the decentralized nature of the cryptocurrency markets, professional crypto traders keep themselves up to date with technological advancements with the crypto ecosystem and stay ahead of the curve. The best crypto signals and strategies can help traders navigate this market by providing insights into market trends and potential price movements. 

Differences Between Traditional Finance Markets and Professional Crypto Trader

Market Volatility: The cryptocurrency market is known for its extreme volatility, which means that prices can fluctuate rapidly and dramatically. This makes trading in cryptocurrencies riskier than trading in traditional financial markets, which tend to be more stable.

Trading Hours: Traditional financial markets usually operate during fixed hours, while the cryptocurrency market operates 24/7. This means that professional crypto traders need to be available to trade at all times, as market-moving news can break at any moment.

Regulations: Traditional financial markets are heavily regulated by government agencies, while the cryptocurrency market is relatively unregulated. This means that professional crypto traders need to be more vigilant and discerning when assessing the risks associated with their trades.

Asset Types: Traditional financial markets trade a wide range of assets, such as stocks, bonds, commodities, and currencies. In contrast, the cryptocurrency market mainly trades cryptocurrencies, although some platforms also offer trading in stablecoins and other digital assets.

Market Analysis: Traditional financial markets traders rely on fundamental and technical analysis to identify trading opportunities. Professional crypto traders, on the other hand, also need to be well-versed in blockchain technology and keep up with the latest crypto developments in the crypto industry.

Liquidity: The traditional financial markets are much more liquid than the cryptocurrency market, which can lead to differences in trading strategies and tactics. Professional crypto traders need to be able to manage the liquidity risks associated with trading in a less liquid market.

Risk Management: Both traditional financial markets traders and professional crypto traders need to manage risk effectively. However, the risks associated with trading in the cryptocurrency market can be more significant due to the market’s volatility and lack of regulation.

Long-term Trader Versus Short-term Traders

Speaking of strategies, a long-term profitable trader and a short-term profitable trader differ in their trading strategy and risk tolerance. A long-term trader tends to hold positions for extended periods, often months or even years. They focus on market trends and aim to capture significant price movements. 

In contrast, short-term traders focus on small price movements, usually lasting only a few minutes to a few hours. Professional crypto trading requires day traders to use leverage and take advantage of small fluctuations in the market to make quick profits. While both strategies can be profitable, a long-term trader is often more focused on risk management and preservation of capital, whereas a short-term trader is more focused on making quick profits.

Why Do Day Traders End Up Less Profitable? 

Only a small percentage of professional crypto trading experts end up being profitable in the long-term. There are several reasons for this: 

• Many traders lack a well-planned trading strategy and instead rely on gut instincts or generally lack the temperamental control to make decisions. 

• Another reason is that many traders do not have the discipline or patience to stick to their trading strategy, often getting caught up in the excitement of the market and making impulsive decisions. 

• Another important reason why most people lose money in trading is due to their emotional response to market movements. They may become too greedy and hold onto losing positions for too long or become too fearful and exit winning trades too early. 

• Additionally, the high fees and costs associated with trading, including brokerage fees, slippage, and spreads, can quickly eat into profits.

Emotional Discipline Among Reasons Most People Lose Money In Trading? 

There are several reasons why most people lose money on trading:

• Lack of knowledge and experience: Many people start trading without adequate knowledge and experience. They may not have a good understanding of how the markets work. They are also unaware of the risks involved, or the strategies needed to be successful.

• Temperamental Control: Trading can be a very emotional experience. To make things worse, many traders make decisions based on fear or greed. They may also show other emotions rather than rely on sound analysis and logic. Lack of emotional discipline can lead to impulsive decisions that result in losses.

• Overtrading: Some traders trade too frequently, leading to high transaction costs and increased risk of losses. They may also trade without a clear strategy or plan, making it more difficult to achieve consistent profits.

• Failing to manage risk: Successful traders manage risk effectively by setting stop-loss orders, diversifying their portfolios, and avoiding excessive leverage. Many inexperienced traders fail to take these steps, leading to significant losses.

• Following the crowd: Many traders are unable to build a plan and follow up with it. They nurture the common touch – latest trend, rather than conducting their own professional crypto trading analysis. This can lead to losses. 

Conclusion

The crypto markets are a well-orchestrated. Similar to a chess game, probabilities, liquidity, and emotional discipline are very important. One cannot only rely or build a strategy on news items. The big boys (whales) just push the news they want in order to achieve faster price movements. 

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