With the rapid development of cryptocurrencies, people are increasingly attracted to its popularity. So why not? They provide very profitable for-profit transactions and privacy. In 2017, Bitcoin rose to $ 236.2 million, a record high.
The world of cryptocurrency offers a lot of things. The cryptocurrency market has gone through massive changes throughout the day. It moves very fast compared to the stock and foreign exchange markets. Due to its volatility, you can achieve extraordinary profits in a short period of time. Likewise, it may be lost in a few days. It was observed that 96% of traders lost 4% won. So how 4% make it possible? Let's work 4% of the merchants who avoid winning mistakes.
Here is a list of all the mistakes that beginners usually make, or for these, even the most professional mistakes in the industry. You need to learn this trading method carefully to prevent making mistakes that could damage your investment.
Do not keep updated and follow others blindly:
Knowledge [obtained from research and used to develop strategies] is the key to successful investment. So, always keep yourself informed. Without validation, don't just rely or track the content on social media platforms.
Watch the news and do your homework. This is a fairly new market, so beginners tend to blindly listen to Slack, Medium, and Twitter “experts” who guide people when buying and selling.
Usually these celebs are rewarded for promoting some icons.
It's fine to listen to others, but it's best to check facts and data, read weekly newsletters, track changes in investment trends, and then trade cryptocurrencies. If needed, create an investment team to invest in the industry and conduct in-depth research.
I don't know how to use the different market indices:
Several indicators should be referenced such as RSI, MACD, SMA and EMA without getting lost in the crowd. Many traders make the mistake of not using enough time to monitor "price action" but rather to apply indicators. Overload indicator can be a problem. Be selective. Indicators may also overlap.
Lack of strategy and over-trading:
Many people tend to engage in cryptocurrency trading, but their secrets hindered and did not develop appropriate strategies in the process. As a result, they end up trading a lot due to excessive craving. To make a profitable trade, avoid over-trading. This way, you will avoid the risk of loss, which may cause problems for your wallet. Make multiple transactions a week as this will get better returns. Plan well and don't set unrealistic goals. For example, don't force yourself to do a certain number of transactions per day. This will inevitably lead to misjudgment and put you at unnecessary risk.
Follow the same old plan without analyzing past performance:
Stay alert. You will never be satisfied. Therefore, always re-evaluate your trading strategy. Look at past performance to see what went wrong or which strategies worked. Prevent yourself from repeating previous mistakes.
Continue testing your strategy. Paper Trading, an online trading platform that allows you to test strategies without risk.
Trading against the trend:
It's too risky. Many experienced traders tend not to follow the general trend to make a profit, but it is definitely not recommended for beginners, especially when the market is in a downtrend. Do not bet for long; Carefully wait for opportunities between the peaks.
Set your stop loss near the initial offer price:
Bitcoin and cryptocurrencies are very volatile. Therefore, setting a stop loss to close a position may result in losses. This move missed the opportunity for traders to face a minor downside opportunity before the sharp rally. When setting the stop loss, the resistance line must be confirmed.
Use a stop loss for every important trade, as this protects you from sudden flash crashes.
Enter the Pump and Dump sets:
These groups claim that they are coordinating actions to manipulate the price of the digital assets by increasing purchases before tokens. But in reality, these groups form stories and publish articles to sh
ow their success. Stay away from these groups. Whenever you encounter such a combination, always check the volume of the transaction. Keep in mind that any 24-hour volume of less than $ 1 million will show a red flag.
Tokens sell at the highest price:
Stay away from selling tokens at their peak. Wait, don't sell.
You never know how much a particular symbolism can grow. For example, when Ripple [XRP] was purchased at its peak in 2017, Tron's stock [TRX] was a hit in 2018.
Although the loss of positions is increasing:
Never keep adding value to losing positions. Although many people recommend buying stocks bought on dips, it is recommended not to indulge in high risks due to personal prejudice.
For example, if you bought the dips during a period in which Bitcoin fell from $ 20,000 to $ 5,800, you would find yourself in severe danger. Therefore, do not buy or sell emotionally. Rationalize your actions based on evidence.
You become greedy:
Although at first this does not seem important. It highlights the many fortunes of cryptocurrency trading. People eventually set theoretically impossible goals to increase their portfolios. Don't expect to double your portfolio in a month. Then put in as much money that you can afford. Affected by high returns, don't be emotional.
The man is not wise. Understand and accept the old, tested truth that mistakes are part of life, because mistakes are something we learn and prioritize others.
So, in addition to being wary of making mistakes, it is wise to learn from them [others or yourself] and act accordingly.
Watch your moves when investing. Listen to your intuition. As long as you absorb the information around you and keep it fully equipped, you can trust your instincts.
Source: Compiled from CRYPTONEWSZ by 0x.