Psychology
Managing your emotions and psychology is incredibly important to help you make the right decisions while trading perps. These are some things you should know before you start
FOMO
Fear Of Missing Out ( FOMO ) is a common emotion every trader has experienced. It is important to avoid falling victim to this. FOMO will usually hit after price has created a strong pump, and it will cause you to buy a top, whilst others are selling, which will most likely result in you losing. If you feel FOMO, remind yourself that there are always new opportunities around the corner.
FUD
Fear, Uncertainty & Doubt ( FUD ) is the opposite of FOMO. This will cause you to sell your position, and it will usually occur after price has moved lower. Often times, traders will get FUD and close a position, that will later reverse and go towards where they wanted. Always review the trade against your trading plan, and dont close positions purely based off emotions
PATIENCE
Patience is an extremely important part of trading and is needed in each aspect :
Looking for a suitable trade
Waiting for a good entry
Holding your position
Taking the most profit from the trade as possible
Lack of patience is something that every trader has struggled with. Here are a couple ways to be a more patient trader :
Accept that there will always be uncertainty
Trade with a position size that will not affect your port
Think longer term - focus on longevity
Impatience will often lead to missed profits due to bad entries or closing too early. Most traders who are impatient also revenge trade. Be sure to focus on improving your patience if you notice it affecting your trading
DISCIPLINE
Without discipline your trading will have no consistency, mistakes will be made repeatedly and no progress will be made. Staying disciplined is hard, but creating a trading plan with a set of broad rules to follow can help you improve your discipline
REVENGE TRADING
Revenge trading is when you try to make back losses from a prior trade without following any rules you laid out. This is very common in trading, but should be avoided at all costs. It often leads to traders losing their entire portfolio as they chase the money After losing a trade, if you feel sad or regret, you should take a break for a while and come back with a clear head. Don’t worry about missing out on opportunities, the market isnt going anywhere and there will be thousands of new opportunities