Most experienced and successful traders will agree that people who cannot control themselves should not enter the crypto trading industry. One must be emotionally stable to avoid unnecessary, unwise trading decisions.
Failing to be so may lead to significant fund loss; thus, learning to be composed and disciplined is everything in crypto trading. One of the specific traits that successful traders should have is resisting immediate gratification when trading. But what is it, and how can we apply it to crypto trading? Keep reading to find out.
What is immediate gratification?
Immediate or instant gratification is the desire to feel pleasure or fulfilment without postponement or delay. It is getting what you want when you want it. Instant gratification is the polar opposite of delayed gratification, which our teachers and parents taught when we were young. Waiting is challenging, especially if the thing you want is right in front of you. The problem comes from our innate desire to have what we want as soon as possible.
Researchers discovered in the late 1980s that a simple delay of gratification from 4 to 6 years old could predict future academic and life accomplishments. The marshmallow test is one of the most well-known psychological assessments ever.
It assesses kids’ capacity to resist the temptation of one marshmallow for 15 minutes to obtain two marshmallows. The public interpreted the result of this test and its follow-up study that if we could only teach youngsters to be more patient and self-control, they could attain benefits like higher SAT scores, fewer behavioural problems, and a better life later on.
However, a recent study cited by Vox tells us that we have to revisit the original test. It demonstrates that this test alone cannot predict one’s fate. Delaying pleasure at the age of five has no bearing on your future. Instead, there are more powerful and annoyingly obstinate forces at work that push or pull us away from our full potential.
Despite that, the marshmallow test is still significant. It suggests that character qualities may influence one’s grit and growth mentality. Others find resisting instant gratification beneficial in decision making, such as the simple tasks in our daily lives. And if we fail to do them, it fires back sometimes.
Trading is an excellent example of this. In crypto trading, waiting is sometimes necessary and inevitable. For instance, you do not want to buy crypto when the market is bullish, and you will not desire to sell it when the market is bearish. Let us further explain this.
When Can We Apply Resisting Immediate Gratification In Crypto Trading?
According to Investopedia, a bear market occurs when a market’s price decreases for an extended period. It often represents a circumstance in which asset values decline 20% or more from recent highs amid widespread pessimism and poor investor sentiment.
Some traders take advantage of the low price to buy more coins in the hopes that they will sooner or later rise again. It sounds risky, but that is how the business works. But times like this also make traders scratch their heads because they find it hard to sell their coins acquired at a higher price.
They will lose money if they sell it in this market situation. No one wants that, for sure. Some traders also get worried that the decline will continue longer than expected. So they get forced to release their coin to stop loss.
On the other hand, a bull market is a time in the financial markets when the asset or security price grows continuously. To profit from bull markets, traders use several methods like hodling. Hodling refers simply to the act of keeping a cryptocurrency for future gains rather than selling it.
At this point, traders generally do not want to sell simply because the price is high. If you buy at a high price, you will have difficulty selling it. Since you acquired the coin at a high cost, you will have to sell it at a price higher than your initial expense. Traders caught in this situation have no choice but to wait for the market to move, wishing the crypto market to pull the prices higher than the initial value of their coin so they can profit.
Knowing when these situations will happen is not easy. That is why traders carefully research the crypto market’s technical indicators. For beginners, this task is arduous, so they go to brokers who can help them get ease in such situations.
And to connect with reputable brokers, they go to reliable trader-broker connecting platforms, such as BitiQ. According to experts at a well-known crypto media company, who composed a detailed article about the platform, it is indeed legitimate, allows easy registration, and is suitable for beginners.
How Resisting Immediate Gratification Applies In Acquiring Crypto Assets?
In addition, instant gratification also applies when we put off buying material goods in favour of investing in assets. The most common error of non-rich people is that they immediately purchase stuff that pleases them or is pleasurable for them. It is typical for young people nowadays.
When they get a salary increase, they buy new devices, a car, and a house or spend it on vacation. Indeed, such people lack financial education. Most probably, they do not know the difference between assets and liabilities. Some even confuse the said things with assets, which is inaccurate.
According to a well-known financial expert and writer of the rich dad book series, Robert Kiyosaki, assets put money into one’s pocket; in contrast, liabilities get it out from their pocket. Assets stimulate cash flow, allowing you to gain rather than expend. A person that observes delayed gratification will not spend to acquire things considered liabilities. But instead, they will use their money to acquire assets that can make money for them.
To Sum It Up
When trading, one of the key attributes that successful traders should have is being able to say no to immediate gratification. It is still applicable, especially during the moments when we have to wait for better rewards. In crypto trading, it is when the market is bullish or bearish. It also applies when we delay our desire to buy material things over buying assets.