What are mistakes not to make in a bear market? The bear market can be a particularly trying time, especially when it's the first one you're facing.
During this period, many people see their crypto portfolio squandered, and this is due, in large part, to very bad decisions made during the market.
To help you navigate these troubled waters in the best possible way and get out of it unscathed, here are some tips that are particularly important to apply when the market is in the red.
Don't panic sell
This is a mistake that many young traders and investors make, and it goes beyond the borders of cryptos.
Indeed, in situations as rich in emotions as a bear market, the most important thing is to remain impartial and objective in your decision-making. Letting emotions dictate your choices will NEVER be a good trading strategy.
Each of your investments during the bear market should be based on concrete and well-considered facts. And this concerns both sales and purchases, FOMO is just as harmful.
Rationality, composure, and hindsight should be your watchwords as a trader/investor, and this applies all the more when the market is subject to high volatility.
Feel free to cut your losses
Conversely, being so emotionally attached to your investments that you don't want to sell them in the right circumstances can also cost you dearly.
During a bear market, many cryptos that have suffered significant declines will never reach their highs again. It is important to keep this in mind and not try to keep your bags “at all costs”.
Trading is all about balance, and that's why being too attached to your investments is just as bad as throwing them away in a panic.
Do not try to anticipate the bottom
When the market is bearish, many novice traders make the mistake of trying to predict when the bearish phase will end.
This is a mistake for multiple reasons, the most obvious being that it is impossible to predict precisely when regardless of your experience in the industry.
The market is unpredictable, and although it is possible to make predictions depending on the context, it should be remembered that these are only predictions.
Moreover, adopting this mindset risks paralyzing you and missing out on the market rally.
If you're just starting out, one of the best techniques you can adopt is called dollar cost averaging. This simply consists of investing an amount that you have set for yourself, and this, at regular intervals.
Thus, you will make sure not to miss the recovery and you will remain a winner in the event that the market continues to fall, since you will always have enough to invest.
Keep an eye on your mental health
Finally, never forget that your mental health comes before any crypto investment. It is essential to spare yourself, to take a step back from the situation, otherwise, it could eat you up from the inside.
Keep an overall and long-term vision, and never forget these two things :
- Bear market phases are inevitable and fully part of the market
- These never last forever
Take care of yourself and invest wisely, this is the only way you can survive in the cryptocurrency market, which is so unpredictable and rich in emotions.
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