How to Stay Calm When the Market Crashes
We all encounter events that rattle us in life. Market crash is one of the most tense moments of any trader or investor. A crash in the market can lead to a lot of fear, confusion and panic whether it is forex, cryptocurrency or even synthetic indices, stock market or any of such. The world is getting disintegrated. You figure it out on one of your trading apps, and it turns out that you are now in the dumps. That quickening of your pulse, that sweating, that feverous activity of mind which are going on. The feeling you get is of closing all your trades or selling all the investments before things get worse.
This is usual whenever people are doing either trading or trading in volatile markets such as crypto or forex by Nigerians. It is the reality that market crashes are regular. And up he GOES; and out he GOES; up and out. Even big investors and professional traders pass through them. The differing ways of doing so are different. The trick to remaining alive and even prosperous following a stock market crash is to relax and formulate smart choices.
Then how can a person stay cool when everything around him is falling apart? What can you do not to feel afraid and panicked because your money is shrinking? Regardless, whether you are a new trader or an expert, these things will make you stronger and smarter in case of a crash on the market.
Among the greatest fallacies committed by individuals is the belief that the markets will always continue to rise. Thus, when the prices begin to decline, they panic and believe that something is going wrong. However, looking at events in the history of markets, whether it is forex, crypto, or stocks, crashes have occurred all the time. This is not something new.
The example of Bitcoin shows that several crashes have happened in the past. In other situations, it even decreased by over 50 percent within short period. This has occurred in stock market and even the Nigerian stock market when people are in political tension or when there is something wrong with the economy. However, in most of these crashes, the market has made a recovery once more and even reached new heights.
Therefore, the viewing of a crash, does not necessarily mean it is time to panic. And remember, and say unto thyself, that this is one bit of the pilgrimage. The fact is that it happened before and it will happen again.” This knowledge will only enable you to relax and act not depending on fear.
The biggest predatory action when a market is crashing is fear. Once your account balance goes down and your position is too far in loss, your mind starts panicking. Your negative thoughts begin to run: What happens to me in case I lose everything? What happens in case this market never picks up? What is it that would help me just end it all and get out?
These are not logical responses but emotional ones. There will be decisions that you make based on fear which are regrettable in later stages. Most people fade at the bottom and close their trading, only to find out that the market recovers later. Some people sell too early on their investments and miss the rally back.
A successful and calm trader is not driven by fear in making decisions. They do not react, they take a step back, breathe and think. It is possible that that there is no need to hurry up when there is still a valid reason why you got into the trade or investment. It must not be a hasty emotional decision to cut your losses because even though the process may be urgent, the decision must be well-thought-out.
In a market crash, it all seems frightening on a day-to-day basis. You watch huge red candles on the chart and your balance is drained in a short period. However, when you look at the bigger picture, the situation might not seem as graphically as it might seem at first hand.
In a scenario of the case you buy crypto coin at a price of 100000, it falls to 60000. That’s painful. However, when your initial intention was to stay put between one and two years, then this is what is referred to as simply, part of the course. The market can creep up to 120,000 or higher in future.
Focusing out can also be done with charts. Stop using 1-minute charts or 5 - minute charts, and use the daily or week charts instead. You can see that at the moment a crash is just a correction on a larger uptrend. This will make you calm down and view the movement as it really is, momentary.
What was it that your scheme was that you went that trade or investment? Had you then only intended to bank it up 2 or 3 days or weeks or months? And what was a take profit was or was a stop loss that you have taken? Why be in a panic when things are going tough in case the answer is yes.
This is why several individuals lose in the course of crash since they do not plan or they get scared to use the plan. An ardent trader or investor will never get into action without a plan.
This is not the life where everything is under your control. It is the same case in trading and investing. The global economy, news, war, government policies and surprises are some of the issues you cannot control. One of them can lead to crash of the market.
However, you can regulate the actions of yourself. You get to choose how much cash to regulate and which positions to go into as well as when or not to bail. Focus on that aspect that you can change instead of concentrating on the part you cannot make changes. That will help to avoid panic.
To illustrate, one of the ways through which you can minimize your risk exposure will be by avoiding high leverage. One can utilize stop-loss in order to preserve capital. You will be able to avoid investing all your money in the same asset. These are some of the easy things that you can do to ensure that the crashes are not also painful.
When there is a market crash, social media get so noisy. People start to shout when the market is destroyed. In case you continue to read or hear all these messages, the fear will intensify. You will begin to not trust your own plan and will do what the others do. And the people are most of the time wrong. An intelligent trader or investor is capable of turning off the noise when it is necessary. Delete it from WhatsApp or telegram group or from twitter. Take that time to evaluate quietly, direct your plan of action and look at facts rather than emotions and gossip.
Revenge trading is another trap that one may take when facing a crash. Suppose you went in a crash and lost a big amount of money. and now you want to make it back in a rush by putting in another big trade. You increase the lot size two-fold, get rid of your stop-loss and hope that it will work out. However, most of the time, this results in even greater losses. It is not what is in your head; you are dealing with your emotions. It is a very irresponsible act.
It is not always charts and money that will keep one calm during a crash, attitude makes a difference too. Another thing to keep in mind is that you are already alive. You get the other experience of learning and developing. You will not be the only one that is affected the rest are feeling it as well. One should always remember not to forget how far they are going in life in elementary There must have been some other victories of the time. There is perhaps something that you can learn out of this loss, something that will be an asset to you in the future. The feeling of gratitude and reflection makes you become emotionally stable despite a difficult period.
And on top of it, do not give up. This is the reason why many walk out of the trading or investing world due to a single bad crash. but what when there is but one step in the gaining of it? Even the most successful traders and investors in the world had losses. The victims were also subjected to a crash They did not give up though. They kept their calm, made their corrections and they moved on. They are respected and affluent nowadays. The accident will not terminate the road. Actually, this may be your breakthrough especially when you do not quit.
.There will always be the ups and downs in the market. Life will have some good days and some bad days. However, it is about how you think that will make you sink or swim with the market. It is not an easy task to remain calm, but this is achievable. It depends on knowledge, self control and inner harmony. Crash just is, Its what it is. Do not make decisions out there of the fear. Get to know how to take advantage of the opportunity. The kind of set-up that enables the operation of a centre like the chinese intelligence agency is one feature that came to his mind when he approached the name of Zalina and thereby gave him that excuse of his reasoning, just as the sun rays would soar right out of the earth and land up on his enthusiasm all the way. And of course and lastly keep on going.
You need to understand being a trader or investor in Nigeria is not the thing of the weak. However, once you have conditioned your mind and learned to remain cool, you will not only live off crashes, you will be a better person, wiser, and in the long run, more successful. Next time the market drops drastically, do not get into a panic. Breathe. Not as the utterance of the last of words By others be thyself thought. And keep on going and going
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Regards,
@adeljose
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