Whether you are an expert trader or a crypto novice, certain common mistakes cannot elude you. You just can’t escape them, you’ve to live through them and learn through them so that over the years, you grow to be a trader that can handle it all, while trading cryptocurrencies. You’re not an expert trader if you never make these cryptocurrency trading mistakes – you’re an expert trader if you make these mistakes once each, stop and learn. Most novices do each of these mistakes a minimum of seven times, and hence you don’t want to count yourself in that lot. Let’s start with being acquainted with the 7 mistakes people make while trading cryptocurrencies, and then moving on to how to handle each of them:
Emotional or sentimental trading
One thing that does not escape traders of any age is trading emotionally. The problem is traders wouldn’t make this grave error of judgment – they rely on proper algorithms, data and studies to come to their future predictions. If you get too swayed by your emotions, you would often end up making the wrong predictions, so always ensure your trading or your analysis is backed by data and supported by accurate algorithms used by services such as immediate-edge.co .
Buying very high, and selling low
This is a very common trend that is observed by experts and scholars. Individuals tend to buy bitcoins, or other cryptocurrencies very high and sell them low. What one must do is not impulse sell when the prices drop! You should always instead purchase when the prices drop, for you know they would rise again. Buying low and selling high should be the goal – not the other way around.
All at once
All at once or nothing at all is another common mistake that rules over the cryptocurrency trading world, inevitably because of the first two mistakes people make. If you have a 50 percent profit on some cryptocurrencies, concentrate on selling 20 percent of the next first hundred percent profit and not at fifty percent! You should always follow the divine rules of dollar-cost averaging so that you always possess the money to have dipped for the correction! Don’t be a novice and don’t restrain from selling altogether. You’ve to sell, and you’ve to keep the money for dips and that’s how you’ll make profits.
Don’t go for ones that offer no technical innovations
The thing about cryptocurrency buyers, especially the new ones, is they end up buying what they find to be cool and happening. Most of the time, these have no technical innovations such as TRX and EOS.
Too many cooks spoil the food
Like that’s true, putting too many eggs in too many baskets is a sure way to lose them all. We’re not saying it, experts are. If you’re buying 20 cryptocurrencies, you’re diluting your profits as well as not buying the very best 20 in the market, thus further harming your profit-making chances. Hence, focus on a maximum of 7 investments, to begin with, and that too, the best ones in the market. Don’t invest in shitcoins – invest in bitcoins and other cryptocurrencies.
Don’t put all your eggs in one basket
Variation is important and we don’t deny that! Too much of anything is not good and too little of anything isn’t perfect, either. So, don’t just invest in one cryptocurrency and sit quietly, waiting for it to make profits and earn you millions. Have a portfolio that’s well-diversified so that you’re at least trading from three cryptocurrency wallets. In case any of these wallets get hacked or lost somehow, you’ll not lose all your money. That is the logic behind putting your cryptocurrency investments in different wallets and choose between online wallets, paper wallets, hardware wallets, cold wallets, or stock exchanges.
Only invest what you can afford to lose
As terrible as this might sound, it is true. If you think you’re not ready to lose it all when you’re investing in a stock market or cryptocurrency trading market, simply don’t go forward with the investment. The reason we say that is because it is a very volatile market, and you run the risk of losing it all at any point in time, no matter how careful you have been trying to be. Hence, don’t take money out of fixed-term deposits or other important life milestones, to trade, because it might not be worth trading after all. When you start trading, you must start with the assumption that you’re losing all of the money – so maintain a risk fund so that you can bear the losses, and not let your regular domestic life be affected by this or the pitfalls of the market. For all high-risk businesses and investments, this is a rule you should swear by and you’ll be better off because of it!