Cryptocurrency trading is an exciting opportunity to make a profit from the markets. However, it can be difficult to make decisions with any degree of objectivity when tribalism starts to take hold. Tribalism refers to strongly-held loyalties and biases shared by individuals within a certain group or community.
In cryptocurrency, this phenomenon occurs when traders form strong ties to certain coins, projects, and ideologies — often placing them at odds with other cryptocurrencies or groups of traders.
Why Tribalism Can Negatively Affect Trading Decisions
The problem with tribalism is that it clouds judgment, resulting in poor investment decisions based on a limited worldview. To make the most of cryptocurrency trading, it’s important to remain open-minded and avoid allowing bias to overtake sound business decisions.
Tips To Avoid Cryptocurrency Tribalism
The following tips can help traders keep their objectivity and make the most of their trading decisions without succumbing to tribalism.
1. Research Multiple Coins and Projects Before Investing
Rather than automatically throwing money into a project, take the time to learn about and research multiple coins and projects. Think critically about the advantages, disadvantages, potential risks, and long-term sustainability of each before committing your funds.
By taking a broader view of the cryptocurrency markets, you’ll be better equipped to make sound decisions based on rationality and logic — not emotion or bias.
2. Don’t Follow a “Herd Mentality”
It can be tempting to jump on the bandwagon when everyone else is making big profits from an investment. However, it’s important to remember that what works for one person may not work for another.
Rather than blindly following the trends, take the time to understand why a particular move is attractive before making your own investment decisions.
3. Use A Free Crypto Portfolio Tracker
Moonrig.io serves as an efficient crypto portfolio management software that enables you to manage crypto assets for free. By setting up a portfolio, you can easily track the performance of multiple coins and projects to make more informed trading decisions.
This can help reduce tribalistic trades because the data and real-time notifications sent by Moonrig.io provide a much more objective look at the markets than relying on your emotions or taking cues from other traders.
4. Remain Open-Minded
At the end of the day, it’s important to keep an open mind and remember that success in cryptocurrency trading requires being able to objectively evaluate markets and make decisions based on the data. Accept the possibility that you might have made a wrong decision, or that you might change your mind about a coin or project in the future.
Final Thoughts
By following these tips, traders can avoid tribalism and make better decisions in the cryptocurrency markets. Don’t be afraid to admit when something isn’t working out, and don’t be afraid to invest in coins that your circle of friends might not be as enthusiastic about.
