Common Mistakes to Avoid While Trading Cryptocurrencies.
Many people are now making their way into the world of cryptocurrencies. What attracts them here, simply put are the, excessive amounts of opportunities that the crypto-world has to offer (privacy to profit). Trading beginners tend to be very inquisitive when it comes to cryptocurrency trading. Trading is a type of activity that involves work to extract profits from the trading process. It is essential to develop specific qualities necessary for achieving high competence, particularly, a very analytical and attentive mind.
Those that are new to the crypto world hoping to earn a difference in the exchange rate without putting in much efforts. However, the reality is something that is completely the opposite this makes armature traders extremely disappointed in this kind of activity. Below is a list of common mistakes to avoid while trading cryptocurrencies:
- keeping yourself uninformed will be catastrophic
Anyway, it is you who will spend your money on purchasing cryptocurrencies. If you do not understand the product and its value, but only listen to “experts” from Medium, Twitter or Slack, who tell everyone when to purchase and sell currency, you will get into big trouble and lose a lot of money. If your decision to buy a currency hinge on on the opinion of someone else, then you will have to rely on this view and when selling. Explore the marketplace in which you work.
- Don’t put in money that you cannot afford to lose.
As an example, we will bring to the deposit all your available savings, or, especially, loan funds. Not a single person is covered against failures and errors; even professional traders often bear significant financial losses. The stories of newcomers who succeeded not to make any of the typical mistakes at the beginning of the trade route can be called anomalous, or at least unlikely, with independent trading from scratch. Mistakes must be made (not intentionally, of course) because learning from their mistakes is much more effective than on others — this is a characteristic feature of obtaining practical knowledge. The best thing you can do before the start of exchange trading is to minimize the consequences of initial errors in advance. The rest will come with time.
- Do not make decisions based on emotions and mis-information
Admittedly, avoiding this mistake can be difficult, especially if you follow the news from the world of cryptocurrency on Twitter with messages like “ABOUT THE LORD, THE COURSE IS GROWING ALL BUYING” or “So it seems that bitcoin has come to an end, it’s better to sell. “Let there be some truth in these reports; it is materially impossible to follow everything at once and, in general, the most patient ones still win. No one in Telegram chats will spread REAL insiders (private information about the prospects of pricing); moreover, even advertised paid channels often give more erroneous information than true. Rely primarily on your experience and recheck the incoming data. And, if you have a plan of action, thought out in advance, it can be fatal to depart from it by shifting moods.
- Refrain from selling your coin at peak values
“This is not the maximum, hold and do not sell,” advised experienced investors. The point is that you never know how much a particular token will grow. For example, if you bought bitcoin for $100, you probably experienced an incredible desire to sell it when it jumped to $ 1000. But today you would have regretted it a lot: the ether is already trading above $ 9,000. For selling cryptocurrency, you need a strategy. Set a goal and strive for it, no matter what. Yes, with the fall of the market it will be incredibly difficult to look at how money flows. But is it worth to panic and sell everything at once? The answer is one: no.
- Refrain from buying cheap coins without knowledge of the currency
Even before investing funds, it is clear how the currency will develop. If this is not a risky investment, then it is necessary to calculate what the result will be from the investment. A coin can develop, but it can be a fraud. You cannot invest money in currency, just because it is cheap. Many inexperienced users are used to thinking that most of the altcoins with a small price are merely underestimated. This is because there are already many stories of sudden growth in value. But this is not so — not all of the cryptocurrencies are profitable.
This, perhaps, is the most serious error possible in the crypto- community today. Hundreds of millions of dollars were lost because people trusted all their data to a stock exchange that was hacked, or to a service that stopped working. With the development of technology, scammers and hackers do not stand still and where money is free, without sufficient control, those sin for them not to take. Even if you have a little money now, and even if you did not plan to stay in the trade for a long time, you should carefully approach the security of your data: two-factor authentication, use of individual computers, data encryption — are mandatory. You need to write down all your passwords, secret keys, print them and hide in a safe place. Thus, if something happens to your computer, you can restore everything to another device.
- Fear Of Missing Out
Fear Of Missing Out. It manifests itself in situations such as the early sale of an asset due to fear of losing profits, buying at the maximum because of the feeling that you are missing something important, or the fear of misplaced a promising ICO, which is why you are capitalizing in dubious projects. It is the fear of losing the profit most often and leads to the fact that we drop profit. Getting rid of FOMO is tough, but you can fight it. To do this, create a set of rules for trading on the stock exchange or choosing a project, as well as limits on the possible allowable losses and profits. Be above it. It is important to understand that new opportunities in the world of cryptocurrencies appear every day, so relax and let this fear retrocede.
Endurance is the key to trading in cryptocurrency. Do not be afraid to slip any deal — the marketplace is so big and ever developing that there will be sufficient money for everyone. However, make sure you remember that it is easy to make profits on the market, but it’s hard to keep what you have made. Do not let greed and greed get over yourself. Follow this list of mistakes that people make while trading cryptocurrencies so that you can stay ahead of the game.