The biggest beginner mistakes in crypto trading and how to avoid them?
The digital currency or cryptocurrency market is known for rapid and sudden changes, so it can be described as a risky market. And you should always remember this, because it will remind you of it and prevent you from putting your money at risk that you might want. Here are the top 10 mistakes beginners make in crypto trading, and how to avoid them?
impatient
Not knowing the dangers
Sell low and buy high
Open level is not secure
Stop learning and being aware of the development of the cryptocurrency market
Skip important events and news
Emotional investment in cryptocurrency
blind trust in research and seeking advice
Investments are not converted into different digital currencies
negative emotions
First mistake: impatience
This is one of the most difficult mistakes to avoid. The cryptocurrency market is very volatile and it is difficult to predict the direction the market will go, so you should not interfere with your motivation and desire to trade, because trading is not a game. If you are not an experienced trader, it will be difficult for you to be patient, however, those who are patient will be rewarded in the end.
Impatience makes you make quick decisions, it can ruin your plans, but worst of all, it can make you panic.
The second mistake:
not understanding the risk Since the volatility of cryptocurrencies is higher than in the stock market, the potential gains and losses are also greater. So you must have good risk management. So, when you invest in this market, you should always keep in mind that you can lose all your money.
The cryptocurrency market has never been a regulated market, and the regulations are only speculative. Many careless investors take thousands of dollar bank loans to get more cryptocurrency and expand their portfolio, so the risks here are very high, especially if these people are invest without experience.
What we recommend here is to stay out of debt and manage your lifestyle. And cryptocurrencies should not become a kind of risky bet on your financial power.
Mistake #3:
Selling low and buying high
Since the crypto market is volatile, which we mentioned at the beginning of this article, the price is very volatile. If you are afraid of even a small drop, you will lose money. And if you decide to sell with fear and fear or something that is abbreviated as "FUD" (the acronym in English refers to fear, uncertainty and doubt), in however simple it is, it is a mistake now. In this case, a mistake would be to enter the market without doing the necessary research.
Then, faced with a sudden or bad news about the cryptocurrency to invest in, you quickly sell your position in an effort to reduce losses. The problem with this approach is that once you sell, you make it your loss. And when you reduce the loss of capital that makes sense in some (such as triggering stop loss), here the decision will be irrational. The crypto market is known to be a long-term bull market, so acting on selling at the first stop is a bad decision. Here, the same thing can be said when the group sees a rise, buys back at a higher price, and repeats the process.
Mistake 6:
Ignoring important events and stories
If you're in the crypto market and have spent any time there, you've probably seen the advice and saying go: buy rumors, sell news.
To illustrate what it means, consider this example:
There have been many rumors that Coinbase is considering listing the BAT cryptocurrency. The price of the coin rose dramatically as the rumor spread, and the price plummeted when the news was confirmed. The listing of cryptocurrencies on platforms like Coinbase and Binance is an encouraging and exciting story. But most of the time, it doesn't go well and is not shot or thrown away.
Therefore, we recommend the first step, which is to buy rumors, because there are often rumors circulating in forums and social networks talking about the list of cryptocurrency and large exchanges. As nothing has been formalized, but investors and markets have started hoarding this cryptocurrency. And some "noise" develops, and the rise of the cycle continues for several days or even weeks. But it continues without any known explanation.
The second step is to sell the news:
The list is announced publicly and the exchange sends out a social media statement. Sometimes the price rises to that level, sometimes it starts to fall when customers start selling what they bought during the rumor.
In fact, the cryptocurrency market is also subject to the effects of possible delisting from known changes, blockchain attacks or hacks, fraud groups, or indecision. Miners at this time hard fork. Mistake
7: Emotional involvement in cryptocurrency
Some traders and investors are in love with their digital currency, and the question here is not a joke, but something very serious. While the trader sticks to his digital currency and even though he gets some profit, and it is time to get the reward of the profit, these emotional people stick to the currency and don't let it go easily and see it as an important part of their portfolio. But this situation is dangerous. The reason is simple: it has nothing. Of course, exiting the market and selling at a loss will be much more difficult. Sometimes you have to put your feelings aside to keep the portfolio in the green.
