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Psychology of trading on cryptocurrency exchanges

Cryptocurrency is virtual money that does not have a physical embodiment in coins or banknotes. Crypto exists only in the form of data, but you can use it to pay for online purchases, invest in it, and use it to store capital instead of bank deposits

Cryptocurrency is virtual money that does not have a physical embodiment in coins or banknotes. Crypto exists only in the form of data, but you can use it to pay for online purchases, invest in it, and use it to store capital instead of bank deposits. Cryptocurrency can be easily sold and bought if the cryptocurrency exchange software development is done in a high-quality and reliable manner. But the price of most cryptocurrencies cannot be predicted - everything depends on external factors and demand. Therefore, investing in crypto is considered risky.

Crypto trading is speculating on its price against usd, other fiat currencies or cryptocurrencies in order to profit from extremely volatile fluctuations in their value. Trading psychology is how a trader approaches the stock market and his trades, thinks about them.

In general, it is a set of reactions of the trader to the events taking place in the market. This is what reflects the nature of trading decisions. Traders can react differently to the same event. For example, with a sharp drop in the value of shares, some, panicking, begin to sell off assets.

Psychology of trading

The psychology of trading on crypto exchanges deals with the mental and emotional state of traders. It is studied how the behavior and way of thinking of the latter affect trade. It also affects discipline and willingness to take risks.

Intelligence also plays a big role in long-term success in crypto trading. Successful trading requires knowledge of legislation and trading rules, an excellent theoretical base, an understanding of the peculiarities of the functioning of the crypto exchange and the stock market, planning and analytical skills, the ability to notice seemingly insignificant details, make decisions based on analytical data and intuitive understanding. And, of course, you need free capital.

When trading on the stock exchange, it is necessary to develop discipline, self-control and be able to quickly react to changing stock market schedules. Stress resistance, flexibility, patience, independence and the ability to make forecasts are important. All this will allow you to earn ethers, bitcoins, and other digital coins more efficiently. Then you can easily exchange for dollars. The main thing is to be sure that the p2p crypto exchange development was performed reliably and safely. Successful trading depends 70 percent on the psychology of the cryptocurrency trader and only 30 percent on the trading scheme. To summarize, the skills a trader needs are:

  • financial literacy and a good theoretical base;
  • ability to manage risks.

Technical skills and analytical abilities are also needed, psychological stability, continuous training, and discipline are indispensable.

Does trading affect the psyche

Trading is a stressful activity. The main factors that increase anxiety are risk, uncertainty, fear of losing money. In trading, it is easy to go into the red if you do not take appropriate measures. In addition to "professional" stress factors, the trader is also affected by fears of a general nature, which also arise on a financial basis: anxiety about the future, family problems,

Therefore, among the first steps of the trader should be:

  • learn the structure of financial markets (who are the participants here, what tasks, goals);
  • to navigate the principles of pricing.

It is necessary to adjust one's psychological and emotional component already at the initial stage.

Features of the cryptocurrency market

The cryptocurrency market is growing day by day. Rapid growth attracts more and more traders, who immediately face the question: which strategy to choose?

From a technical analysis, cryptocurrencies are poorly forecasted, so indicator trading strategies are inappropriate here. In fundamental analysis, the factor of unpredictability remains. A psychological strategy for crypto trading is important. The cryptocurrency market is driven by the psychology of private and institutional investors. This is what you need to use to form a trading strategy.

How to make money on cryptocurrency using psychological techniques

Analyze offers in a glass, volumes of demand. You should not place large orders that can trigger the market. If there is an order in the glass that covers more than 20 percent of the total volume, it is better to refrain from investing. The task of the trader is not to make money from the temporary growth of a little-known coin with a low level of liquidity, but to minimize risks.

Estimate the volume of trading on crypto exchanges (there are special sites for this). If the trade is not distributed in equal parts, there is a significant "skew" in the daily trade volumes for one exchange, maybe someone is deliberately raising the price of the crypto. This is typical for little-known coins with a small capitalization. The hype around the coin can be specially created by an institutional investor, due to which the crypto increases in price, after which the asset "merges" at an inflated price.

It is important to diversify risks. When the inflow of fiat money is not so significant, finances can flow from one cryptocurrency to another.

Buy at the bottom. The crypto market is characterized by high volatility. A drop of 25 percent for an asset in one or more days is the norm. Therefore, you should buy during the next correction. If a coin is asking for more than 30 percent, it means that investors do not trust it.

Analyze your feelings

You cannot give in to the emotional mood of the crowd. Communicating on forums is a good idea for Forex, but not for the crypto market, where everything is unpredictable. By succumbing to the opinion of the majority, the trader risks falling into the trap of large investors who use rumors as a manipulation tool.

Do not enter a market that is growing at a very fast pace (pump). Rapid growth (30 percent per day) relative to past periods may indicate that the growth is speculative and will correct in the near future.

Ignore temporary fixes. Despite the fact that the graph of the crypto value resembles the formation of a pyramid and the trader's task is to withdraw money on time, there are no prerequisites for the collapse of the crypto market.


Stock trading is a nervous activity. It is important not to forget that a person's success in any field of activity depends on the emotional component, namely internal balance. And trading is no exception. If you don't learn how to control your emotions in this field of activity, the results can be deplorable. The psychology of trading significantly affects the results of stock market speculation both in the traditional market and in the field of cryptocurrencies.

Therefore, not only working according to a proven trading scheme, but also excluding greed, fear, excitement, and other negative emotions, will gradually lead the trader to success.

And yet, it is necessary to understand and be ready for the following: there is no 100% guarantee that you will be able to become a successful trader. The market is an extremely dangerous and aggressive environment for capital. It should be taken into account that even experienced market participants lose money, let alone novice traders. But it is worth trying, achieving results using crypto exchange software.

Trading is suitable for those who want to be financially independent and have strict discipline. If you want to "chop cabbages" - trading is not for you. And beginners in the business need to start learning the basics of trading right away. These are basic concepts, graph, terminal and levels. Crypto exchange software will always be an assistant.

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