Mind Management in Cryptocurrency Trading and Investing

Introduction

• Mind management interconnected with money management
• Effective money management influences mind management
• The complexity of the mind affects success in trading and investing
• Reality is shaped by our thoughts

Controllable vs. Uncontrollable Factors

Uncontrollable Factors

• Market: a place where buyers and sellers meet
• No one can completely influence the market
• Even large entities like market makers can't guarantee success
• Market functions like a voting machine: unpredictable, collects buyers and sellers
• Importance of reacting to the market rather than predicting it 

Key Concept: Controlling Input, Not Output

• Inputs: Strategy (20%) and Mentality (Psychology 80%)

Before Investing - Mind Management

1. Define Goals
   • Why are you entering the market?
   • Goals: Wealth accumulation, wealth preservation, or hobby
   • Break goals into three income sources: Active, Passive, Portfolio
2. Set Boundaries
   • What to learn: Financial literacy, market data interpretation
   • What not to focus on: Technicalities of exchanges or blockchain protocols
3. Build Conviction
   • Knowledge transforms into belief, and then conviction
   • Essential to understand Bitcoin, blockchain, and cryptocurrency fundamentals
4. Be Realistic
   • 97% of traders fail
   • Comparison to entering NBA
   • Requires full commitment with no guarantees of success

During Investing - Mind Management

1. Avoid Biases
   • Overconfidence: Feeling overly capable due to beginner’s luck
   • Herding (FOMO): Following the crowd blindly
   • Mental Accounting: Valuing investment in terms of what it can buy rather than its growth potential
2. Capital Preservation
   • Avoid unnecessary cash-outs
   • Preserve portfolio income for reinvestment
   • Avoid breaking the compounding effect chain
3. Self-Comparison
   • Compare with your past self, not others
   • Everyone has different starting points and timelines

After Investing - Mind Management

1. Gratitude
   • Appreciate any profit, big or small
   • Compare with losses to foster gratitude
2. Avoid Revenge Trading/Investing
   • Don’t over-leverage out of jealousy or impatience
   • Focus on long-term growth, not quick gains
3. Continuous Compounding
   • Maintain and grow skill, mindset, and emotional intelligence
   • Understand the process rather than relying on luck
   • Avoid becoming a short-term lottery winner without sustained skills

Conclusion

• Reality is created by our mind; a strong mind leads to success
• Importance of mental fortitude for continuous growth
• Need for effective mind management before, during, and after investing
• Long journey ahead in crypto markets requires robust money and mind management

By Kalim Masanda from Akademi Crypto