How To Avoid Beginner’s Mistake When Investing Crypto
By Billy Lee on ALTCOIN MAGAZINE
(My Own Experiences And Mistakes)
Two years ago was the time when I first started investing and trading in cryptocurrencies, interestingly enough it was also the first time for me to trade. At that time I would describe myself as a little lamb walking into a huge greenland mixed with poisonous weeds that you can’t really tell.
Back to the story, I was persuaded by one of my friend who was originally active in investing stocks and now moved his aim to cryptocurrencies, as he knew at the time crypto market was a gold mine, you will always profit whatever you invest (certainty not in these days). Friend of mine invested 4K USD in all sort of altcoin which I knew nothing about and he quickly tripled his portfolio.
Investing with a Long Term Plan
As a poor young college student, who doesn’t want free money like that? I quickly invested in with everything I’ve got at that time, investing without a plan and bought some VET, NANO, ETH and of course bitcoin. It took me a month until October 2017 to deposit and started investing, and here is when I start to make my beginner’s mistakes. Investing only with the drive on making a profit and without a long term plan was a mistake. An investment without any planning ahead cost me everything, sadly I only learnt my lesson after I lost almost everything, but I guess success only comes from failing, so it would be a good experience to have for future investment.
Don’t Let Your Emotions Take Over Your Mind
Soon after the start of 2018, the market “crashed”, my rocket ran out of fuel, and my portfolio started seeing red as it seems like my wallet is bleeding out. My hopes and my emotions were too high that I eventually forgot what’s the risk of investing, especially in the crypto market. I didn’t know when to let go or what to do, I just sat there checking my portfolio every hour and debating should I HODL or should I bail, would you rather lose it all or wait till the market recover?
My decision was, why not both, I sold all of my altcoins and kept all of my bitcoin when I bought at 9000$USD and it climbed all the way to 19000$ and now back down to 7000$. I regretted so much why didn’t I sell at that time, and the answer to this was greed and inexperienced. After that loss, I’ve stopped investing in cryptocurrencies as it took too much time to look at the market every single day and most of all, it was very risky to lose it all, especially if your emotions take over your mind.
Don’t Only Focus on Coins That has a High Trading Value
One of the common beginner’s mistake is that you should not only invest in coins that have a high trading volume since beginners don’t have the experience to get used to the fast-paced action in the crypto market, but mistakes are also much likely to be made.
When crypto has a large trading volume, it means that the market can be stimulated and triggered very easily, the risks involved will be obviously higher, therefore it is not suitable or recommended to beginners. For my own experience, I blindly invested in coins that are considered as huge or have a high potential of succeeding at that time, however it wasn’t as perfect as described by the others on the internet. The lesson I learnt is you should always take notes for yourself and don’t trust others’ word that easily, always do your own research before investing in any cryptocurrencies.
Patience
For first time traders like me, the most relatable mistake is the lack of patience in the game, we expect the minute that we invest in the coin, profit will start rolling into our pockets automatically with zero risks. In fact, patience is key especially when investing in cryptocurrencies, the market can either go up or down very quickly, a coin might be the coin of the month and the next month you might see red. Like my personal experience, I was sitting on the rocket collecting profit for a while and being cocky at the time, when everyone on Reddit was commenting their coins will blow up to the moon, my portfolio went boom with the market, tripled or even quadrupled. Green was my favorite colour at that time, however, it lasted not long until the start of 2018. The lessons I learnt here was embracing the risks and being patient are important factors to success when investing in cryptos, being reckless and blindly invest with your own investment is no different to gambling.
Conclusion
The beginner’s mistakes that you always want to avoid is to not let your emotions to take control of your mind, making sure you always have an investing plan. Being patient and buying low and selling high can be difficult since you never quite know when is the lowest or the highest, especially in the crypto market. One thing I didn’t mention is that I was so insecure of the constant fluctuation in the market, it panicked me as I wasn’t really ready to adapt the concept of investing and there will be risk involve all the time. However, it can be easy to make money on the crypto market, but it is not as easy to keep what you’ve profited and cashed out.
Billy Lee
Currently a student from Lancaster University and an intern with XP Invest.
XP Invest is a platform that enables traders to use their Bitcoin Holdings to trade exposure in traditional equities such as Nasdaq 100, Apple shares and many more!
If you’re active in the crypto space and are looking for new profit-making opportunities, or opportunities to hedge against the volatile price movements visit https://www.xpinvest.io/
18/06/2019
