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How to Avoid Panic, Stress and Making Stupid Mistakes in a Dip, Correction or Bear Market
Here is a psychological trick for how not to make stupid mistakes during a dip, correction or bear market with your portfolio.
I have tested this very successfully during the past few days and I'm sharing it with you in this article -- to transform your paper hands into diamonds 💎 -- and to help you prevent or cope with anxiety, stress or even depression.
You only invested money you don't need for at least a couple of months.
You don't use leverage.
If the above two points are true, the best option after a big dip, correction or in a bear market is to just hold your assets -- or even better: spend and replace your BCH. (If you do that, you will see that peer-to-peer electronic cash works fine irregardless of the price -- as long as it is above 0. 😉)
But watching your portfolio's Dollar value go down every single day -- and day after day, maybe for weeks -- really doesn't feel good at all. In fact, it can make you quite depressed. Or anxious. Or stressed. You might even have a hard time sleeping.
And in such a state of mind, making terrible decisions just to end the anxiety, stress or depression happens too often, unfortunately.
So how can we keep a clear mind, stop worrying and most importantly not sell at a loss at the bottom?
The very best option is actually very simple in theory, but so hard in practice:
Just don't look at the prices.
That's it. If you're not leveraged, if you are convinced that you bought assets with solid fundamentals, if you believe crypto is the future and you plan to hold your assets for several months or years anyway, what good does it do to keep looking at the current prices?
Don't waste your time, don't let the current market worry you. You don't plan to sell right now anyway. So why bother?
Imagine you bought an old car and you are absolutely certain that it will be a desirable classic one day, will you constantly ask car dealers how much they would give you right now for it -- before the car is actually a classic?
No, you wouldn't. It's a waste of time.
OK, the above advice is theoretically very simple, but in practice quite hard to do -- especially if you are active in the cryptoverse -- or if you spend and replace your BCH, you won't be able to ignore the current market price.
I know trading is a waste of time and most traders perform worse than holders.
However, I like it anyway. I like the thrill of it, I love making profits when a trade works out and I actually also enjoy the anxiety when it seems like it doesn't.
At the same time, I don't want my portfolio's performance to suffer too much.
That's why I have a separate trading account where I can play trade with very small amounts of money.
While it is fun and a laugh when your trade is down 50% -- if you only invested $5 -- imagine the same trade in case you invested $5,000, $50,000 or even $500,000 and your trade is down 50%. It is the same trade performance, but it feels completely different, right?
Small position sizes are the key. Alternatively, you can even use a demo account and not risk your own money at all.
During the most recent crypto dip, I actually shorted BTC with $5 and 5x leverage making a couple of Cents with each trade. It was my way of coping with losing thousands of Dollars in value in my real account -- and it helped me to get through the correction without selling any of my positions in my real portfolio at a loss.
Here is a screenshot of my recent short trades in my play trade account which I funded with $50 initially. I use Bityard for that. They also offer a demo account. You can create a free account here.
I believe that the best way to deal with something that might make you feel sad, is to joke about it. It reduces the severity of the events and it reminds you that in hindsight, the situation will probably be pretty funny according to the scientific equation: