The word equanimity refers to a calm mental state, especially after a shock or disappointment or in a difficult situation.
Equanimity is a very important character trait of a smart trader.
With respect to trading, Equanimity means having good knowledge of what's happening around you in the world, being aware of the situations and circumstances around you, able to comprehend that and make peace with it.
Financial Market is like a battlefield where Equanimity could be your AK-47. You must have it if you want to win the war at hand. Wars in financial markets are fought with our ideas and balanced state of mind.
Talking about crypto markets, we all know how volatile it is. We have seen bitcoin touching the $60,000 mark in Feb and April 2021, rising from nowhere. We need to maintain equanimity in our character to be able to prosper from such volatile markets.
Equanimity is a Neutral state of mind.
If you are a timid trader who gets upset with market losses, you need to reprogram your mind to get more calmer. Or if you are a person who believes in taking huge risks, you need to clear your head so that your decisions can be more poised and prudent. Your mind is a big weapon. You must keep it sharp and attentive at all times; this will help you be in the game for a much longer duration and make better profits.
An Equanimous trader will always take calculated steps. He will not invest unless he understands all aspects, including the goals, vision, and future prospects of where he is investing.
Talking about my own self, I was not an Equanimous trader at all. In my early twenties, when I just started to earn, I invested in some shares. I used to do intra-day trading. But my buy and sell decisions were mostly governed by just the historical charts. I didn't use to read about the body where i was investing, it's future plans; nothing. Considering it was an intra-day trading for me, i blindly used to follow the trends and it failed for me, bad time. I could never make money out of trade market back then.
But the good thing is, I learned. Now I understand that trading cannot be done basis those charts; that's just one of the things to look at. There are so many other aspects one must pay attention to while making trade-related decisions. I have grown into a judicious trader now; i follow news on Twitter, i look at plans, i also follow some great minds who share insights on portfolios. And most importantly, none of my trading decisions are hasty. I buy after thinking a lot and even then if I am not in a good position, I wait until my position gets better. Afterall, you are not in any loss unless you make a sell decision.
Acceptance and Expectations are 2 words very closely linked to Equanimity.
You got to accept what's happening around you and absorb it. Your decisions should be based on your acceptance of the real-world scenarios and not basis your instinct. So when you know Marc Cuban has invested in Matic, it is bound to rise and you got to prepare yourself accordingly. A person who lives in denial mode can never be equanimous. You should also learn to keep a check on your expectations. Hih expectations put you in a very un-equanimous state. Some coin giving you a high return today might eat away all your profits tomorrow. So you have to manage your expectations in a way that you don't end up losing your calm when they are not met.
The other important aspect is, you must learn to understand the link between the mind and the body.
A relaxed mind can be sustained only by a relaxed body. Breath deep while you're trading. Be hydrated and eat well. Take an ample amount of sleep and keep yourself entertained. And that's how you achieve the true state of equanimity.
To end this blog, I would like to mention that Equanimity is not something you have to learn from day 1 of your life. It requires a lot of exposure to the outside world, wisdom, and courage to be Equanimous. If you aren't one right now, that's not a problem. Your mind can be re-programed to learn this train whenever you feel it's the right time. And once you have it in yourself, it stays forever like a good habit.
