Trading Mistakes to Avoid for Crypto Beginners.
Welcome to the latest issue of CapitalRollup Digest! Today’s digest is for July 15th and it should take you about 5:00 minutes. We’ll get right to it.
- What does the Market Look like today? (Top 5/10 popular Cryptocurrencies)
Trading Mistakes to Avoid for Crypto Beginners
Trading crypto profitably can be very risky and difficult for investors. It is not for everyone, but if you are willing to take a risk, you can potentially reap great rewards.
The Crypto market is one of the more volatile markets out there and trading it profitably can be very difficult especially if you’re a beginner. It is estimated that 95% of traders lose money when they trade crypto and this includes experienced traders.
Becoming profitable at crypto trading often involves a lot of skills and strategies, and this is what a lot of beginners luck. The right approach starts with an in-depth understanding of the market.
Below are 6 mistakes new traders make when trading cryptocurrencies that you should avoid.
Not Diversifying Your Portfolio
Your cryptocurrency investment strategy must involve diversification. While it may be tempting, don’t put all your eggs in one basket. Every experienced investor minimizes or protects themselves from risk by investing in multiple assets. Some coins go up and down in tandem when one goes up while the other goes down. If this is the case and you are interested in both coins’ futures, then consider investing in both. Investing in this way is much safer.
FOMO: Don’t follow the crowd
FOMO means fear of missing out. It is one mistake many crypto traders make, particularly in a situation where everyone around you seems to be trading in a particular way, you may get the feeling of FOMO (fear of missing out).
Every trader has their style. In other words, Mr. A’s ways might not work for Mr. B.
As a beginner, following the crowd’s way of trading might feel like the right thing. However this isn’t true, You can perform technical or fundamental analysis or consult an expert if you do not know at all, yet you will find your niche in crypto trading.
Beginners want shortcuts
There is no shortcut to trading, so don’t look for one. Keeping an eye on the charts is as important as keeping an eye on the news, and there’s no easy way to play the market. You must develop and stick to a strategy if you want to make gains.
The sudden surge in the price of a cryptocurrency isn’t always a sign of a pump and dump scheme — positive news or promotion by a major influencer can also cause it to rise. Understanding why a coin is soaring is necessary before investing. Otherwise, you can get rekt. Most novice cryptocurrency traders experiment with pump and dump groups that promise instant profits. Traders who have experienced loss once or twice learn their lesson and pursue wiser approaches.
New to trading? Try crypto trading bots or copy trading
Trading multiple markets at once
It is not uncommon for novice traders to jump from one market to another, from forex to indices, and from cryptocurrency to commodities. It’s a common mistake that can lead to overtrading and significant losses.
Rather than following your emotions, try understanding how the market works based on facts. Before getting into another market, you should gain experience in one market and firm your grip there before you start trading in others.
Trading emotionally
Trading shouldn’t be based on emotions. Be consistent, don’t get attached to assets, losses, or the notion that you’re a “good” or “bad” trader. Getting an expert or reading books on trading can help you when the emotions try to set in when trading. If you have a gambler’s mindset, these patterns might emerge in your trading, and it might either mean you’re not suited to trading or end up needing to address these issues.
Giving in to FUD (Fear, Uncertainty, and Doubt)
FUD is short for fear, uncertainty, and doubt. The goal of FUD is to scare you into selling, not buying. It usually occurs when negative news spreads fast over the market, which then causes traders to panic sell, and loses faith. Think before you act.
Closing thoughts
In our newsletter today, we went through six mistakes new traders make when trading cryptocurrencies. If you follow these simple tips, you’ll be able to avoid some of the most common pitfalls when buying or selling cryptocurrencies. Also applying these tips in any trade will help reduce loss, and also help you grow and mature as a trader.
Diversifying your portfolio is important in becoming a profitable crypto trader and we’ve got you covered. Check here to see how Capital Rollup can help you diversify your portfolio.
•Trivia 🤔
Regulators and law enforcement can’t trace cryptocurrency transactions.
A. True
B. False
Find the answer in the next issue of CapitalRollup Digest. 😉
The answer to the last trivia was D. All of the above.
Crypto Word Of the Day!
💡 BUIDL
BUIDL is a derivative term of HODL. It acts as a reminder to keep our heads down and keep building the infrastructure that may very well serve billions of people in the future.
The term used in a sentence:
— BUIDL is the misspelling of the word “build”.
Community Update 📢
We organized a Twitter Space session with 3 industry leaders where we discussed “Share your Bear Market experience & CeDeFi implosions” you can listen to it right here
•What We Are Reading Today 📰
Cryptocurrency trading. Read more
How to trade cryptocurrencies. Read more
Learn and invest in Crypto with friends 💰
Earn unique rewards when you invite your friends to start investing profitably with CapitalRollup.
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