IQ Option Trading Psychology: Overcoming Fear and Greed

IQ Option Trading Psychology: Overcoming Fear and Greed

IQ Option just released a new think piece that is relevant to all traders, but especially traders in such a highly volatile market such as the cryptocurrency market. In the cryptocurrency market specifically, where high value assets can regularly and easily have 10-20% swings, understanding and overcoming these emotions is one of the most important factors when trying to remain non-emotionally attached to your investments. 


The first emotion to understand when trading is your fear. Fear is a rational response to your trading situation, as you do not want to make the wrong decision and financially hurt yourself. Fear is definitely a natural reaction, but you cannot let it control you, as it can lead to irrational decision making. Fear can be exaggerated and not on par with the actuality of the situation, so it is important to not be controlled by your fear when you are getting ready to conduct a trade. There is also another type of fear, the fear of missing out on an opportunity, or FOMO for short (fear of missing out). If you fear you are going to miss out on a trading situation, there is a much higher chance of making a flawed and rushed trading decision that will end up hurting you. You see other people following the trend, so naturally you do not want to miss out on it, but make sure you do your due diligence to analyze if your entrance point is feasible.


Another important emotion to cope with, especially within the context of trading cryptocurrencies, is managing your greed. Although the technology behind blockchain protocols is revolutionary and world changing, we still need to understand that the reason people are financially involved in the market is because they think it will benefit them positively. When a trader is being faced by greed, they may take much higher risk chances even though they may not be necessary. Sometimes, greed can even be fueled by fear, which can lead to a double serving of emotional disconnection.


To cope with these unnerving emotions, it is important for a trader to set up a strategy they will stick to and try not to deviate from, as this will set a ‘guideline’ for you as you are faced with potential fear and greed. When you have a plan that you can reference, it is much easier for you to react strategically instead of emotionally. 

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