As you venture on the cryptocurrency space, you might find some successful trading stories wherein their 100$ gains 1000x. But bear in mind that trading isn’t just simple as it may seems especially that cryptocurrency has known for its volatility. Every minute counts or even seconds. A cause of delay might ruin your chances on taking profits.
In this article we will find out some common mistakes that beginners make all the time that can completely ruin your crypto portfolio and lose all your money.
Common Trading Mistakes
Entering the market without a solid plan
Analyzing the market condition and understanding its trend is the first way to avoid being rekt. It would be important to know the coin you will choose to trade. Do your own research about the projects and stay up to date on news. Assessing this variable will surely give you a bigger understanding on the trade you are going in.
Having a trading strategy like dollar cost averaging is the best way for beginners to gain profits from a trade and to avoid your portfolio being completely out of money.
Investing money that they can’t afford to lose
A simple rule on the crypto space is “investing only what you can afford to lose”. Making sure that none of your trades could cause huge amount of loss that will entirely destroy your portfolio.
Remember that losing money that you can’t afford to lose makes your decision making compromise resulting that may result to even more loss.
Following the hype
Following the hype is okay if the coin has strong fundamentals. There are certain schemes like pump and dump that you should be aware of. Beginners usually trades based on news or post by some well-known person on the social media. Cryptocurrency is unpredictable so learn to do lots of research before entrering a market.
Trading with emotions
Humans are not emotionless. But this emotions are the greatest enemy of a trader.
When trading cryptocurrency, a trader feels euphoria when the price goes up that may result to greed, and despair because the price is going down making you close your trades early.
This emotions will have a negative effect on your ability to make rational decisions.
Trying different strategies
Choosing the best trading strategies that suits you is a good factor to make your trading successful. Bear in mind that the first results might not provide definitive evidence on the reliability of the strategy and it doesn’t mean that the strategy you have chosen is poor. Remember that assessing a strategy without proper analysis could be misleading.
Final words
Cryptocurrency trading has been a lucrative activity for beginners even for experts. Some might come out successful and others may not. Knowing this common mistakes doesn’t mean you will need up trading successful. It is just a reminder that crypto trading is a not a game for the faint hearted,
Good luck on your trades.
