It’s surprising to discover how crypto trading, especially dealing with derivatives in the crypto market, taught me valuable life lessons. Being a newcomer in derivative trading resembles gambling; despite being informed about the game’s rules through research, the mind becomes intoxicated by a volatile market.
Needless to say, I made numerous mistakes at the outset, which you can read about in detail here: 5 Rookie Mistakes I Made In Crypto Derivative Trading.
However, I engaged in full-time crypto trading throughout the year in 2019-2020. The experience provided profound insights into my personality and perspectives. Here are five significant takeaways that impacted my later life:
1. Patience And Discipline: The Wealth Duo
My proficiency in technical analysis was quite commendable for a beginner. Whenever I entered a trade, I set my entry and exit prices based on my analysis. Initially, I tended to exit the trade before reaching my target due to fear of loss and impatience, often seeing things unfold as I had planned.
Over time, I learned the art of waiting, being patient for the market to unfold, and accepting the outcome. Lack of patience and discipline led to several other mistakes in my early days. However, once I achieved composure in my reactions and displayed discipline in my decisions, I witnessed the results accumulate over the long term.
This meant that while I might lose a trade in a day, the net profit for the day or week ended up in the green. That’s how wealth is created, surpassing momentary riches.
This experience also instilled more discipline in my life. Small, consistent actions over time cultivated a wealth of habits and skills.
2. Detachment: Key To Happiness
I constantly worried about the trades I took and the ones I missed. I frequently scrolled through trading apps during the day, whether I was at a restaurant or spending time with my nephews. I had become so attached to the market and its updates.
Detachment proved to be one of life’s most challenging lessons. Over time, I began setting aside dedicated days off for trading and shut down the system. It took considerable effort to consciously engage in other activities, but eventually, it became easier. The more I detached myself from the trading setup and updates from the industry, the more realistic and clear things became. It was almost like stepping out of a bubble, and I started appreciating the world around me, gradually finding happiness in this seemingly small yet significant step.
3. Healthy relationships = Wealthy Life
As mentioned earlier, I was content with my isolated life back then. Despite making money and having an engaging online community, all the money I made was meaningless when I neglected my friends and family.
Now, having like-minded people around you with whom you can discuss crypto or industry updates is a blessing. However, life often doesn’t align that way. At least for me, I was surrounded by “normal” people who had no interest in any of these things. Yet, these were the same people who mattered the most to me.
Establishing healthy boundaries between my business and personal life strengthened human relations.
4. Emotions And The Risk Appetite
Decision-making was a struggle when I first started trading. On paper, everything seemed to work out perfectly, but once I engaged in real trading, I stumbled at various steps. Most of my decisions were emotionally driven. Eventually, I realized that my risk appetite was much lower than I had imagined.
Experiencing losses in a trade scared me more than losing sleep. Sometimes, I would wait for hours just to avoid losing a mere $1. It sounds trivial now, but in those moments, all I cared about was winning the game.
Understanding emotional responses and their impacts turned the tables. It became easier to accept the market, trends, and results. This acceptance facilitated smooth decision-making and execution. Needless to say, this learning extended beyond trading to life itself.
5. Growth Mindset
When I began trading, I had an “all or nothing” mindset. I engaged in a lot of revenge trading to break even, which eventually depleted my accounts. At times, I increased position size just to maximize the profit from an ongoing trend. It got messy when my focus shifted to either taking everything home or losing it all.
Eventually, I found a middle ground that emphasized growth rather than one-time wins. Growth encompassed both profit and loss, finding a balance between them. Consistent learning facilitated this growth and the creation of wealth.
Learning new techniques, understanding different indices, and analyzing past events made things more manageable. Trading styles vary for different personalities. Learning various techniques helped me create a system that worked for both my trading style and lifestyle. Moreover, a few indices enhanced my technical analysis skills as well.
This shift in mindset significantly influenced my overall decision-making in life. The minor setbacks became less significant and fueled continuous advanced learning.
Looking back, I’m glad I started trading with my own crypto instead of engaging in simulation trading. Real-time trading was a roller-coaster that provided numerous insights into my life. Even though I discontinued derivative trading after a while, I’m still amazed at how this experience transformed my perceptions of life!
