As I've been writing about for some time now, it appears the crypto bear market is concluding.
We're in a bull market in traditional assets and stocks are still pressing higher.
I'm still bullish looking ahead in the coming months and quarters, but neutral in the short term as Bitcoin trades sideways in anticipation of a breakout.
These last six months in the crypto market have reflected the utility of patience in trading. Because we view trading through a financial lens, we always assume that risk management is preventing financial loses. And as such, we integrate strategies to mitigate against such losses.
These include stop losses, invalidations, and hedging strategies.
And while these are imperative in preventing losses from spiraling out of control, there is another aspect that gets commonly overlooked.
And that is psychological risk management.
Just like our portfolio value, we need to maintain a healthy balance within our inner emotional and psychological wellbeing. When we have a prolonged stretch of losing money in the markets, it negatively weighs on our mind. As such, this can create a negative feedback loop whereby we make decisions without awareness of the emotions in behind them.