2. A few consecutive profitable trades don’t mean you’ve found a reliable method.
Suppose you’ve made the right call on three trades in a row.
Of course you can feel happy, but that alone doesn’t prove your trading method is mature.
This is especially true in volatile crypto markets, where short-term results can be significantly affected by luck and market conditions.
What’s really worth examining is: Do you have a clear trading rationale? Do you follow your own rules on every trade? Can you manage risk when you’re losing? Does your method still work when market conditions change?
Assessing your trading ability takes more evidence than a few successful trades.
3. The most dangerous thing about a bull market may be that it makes you increasingly willing to take risks.
After a string of profitable trades, some traders start increasing their position sizes and leverage, or even abandon the risk limits they originally set.
They might think:
“I’ve been getting my calls right lately, so putting in a little more this time should be fine.”
But the market won’t guarantee that the next move will go as you expect just because you made money before.
A method that seems effective during a sustained rise may expose risks that were previously overlooked when volatility spikes or the market reverses.
So risk management isn’t something to think about only after you’ve taken a loss.
On the contrary, the more consistently profitable you are and the more confident you feel, the more important it is to stay disciplined.
Suppose you’ve made the right call on three trades in a row.
Of course you can feel happy, but that alone doesn’t prove your trading method is mature.
This is especially true in volatile crypto markets, where short-term results can be significantly affected by luck and market conditions.
What’s really worth examining is: Do you have a clear trading rationale? Do you follow your own rules on every trade? Can you manage risk when you’re losing? Does your method still work when market conditions change?
Assessing your trading ability takes more evidence than a few successful trades.
3. The most dangerous thing about a bull market may be that it makes you increasingly willing to take risks.
After a string of profitable trades, some traders start increasing their position sizes and leverage, or even abandon the risk limits they originally set.
They might think:
“I’ve been getting my calls right lately, so putting in a little more this time should be fine.”
But the market won’t guarantee that the next move will go as you expect just because you made money before.
A method that seems effective during a sustained rise may expose risks that were previously overlooked when volatility spikes or the market reverses.
So risk management isn’t something to think about only after you’ve taken a loss.
On the contrary, the more consistently profitable you are and the more confident you feel, the more important it is to stay disciplined.