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Are you considering the trading cryptocurrency, but are a complete beginner and afraid to make mistakes? In this article, you’ll learn about the top three errors newbies make when trading cryptocurrency.
There are multiple variables that go into making a successful trade and knowing what to avoid is crucial to making a profit. You’ll still need to find out a winning strategy, but having the knowledge of trading tips to avoid will put you above most people.
Read onwards for the 3 cryptocurrency trading mistakes to avoid.
1. Not Using Cryptocurrency Exchanges Properly
The biggest mistake beginners make is not using the cryptocurrency exchanges properly. The bigger platforms give you methods of making money easier from staking the margin trading. Before you start using these methods do your research because otherwise, it can come back to bite you.
Margin trading is a brilliant way to make more money because you can buy more coins even if you have a minimal budget. Margin trading lets you borrow money from the exchange with your assets as collateral.
Therefore, if you have good information that a coin is most likely going to increase in price over the next few days you can do a margin trade and borrow 10x your budget. However, note it’s never guaranteed for a coin to go up in price as the market is so volatile.
2. Trading with No Plan in Place
One of the most common mistakes traders make is not knowing when to pull out of a position. When selecting a coin it is pivotal to have exit prices so even if the price falls you make money or at the least break even. Also, when establishing a trade have a stop-loss set because the cryptocurrency market is volatile with 5-10% price changes is not uncommon.
3. Starting with Real Money Before Paper Trading
Trading is a skill that you’ll need to learn through experience and the best method is using fake money. This way you’ll through your mistakes and see what to avoid when looking at coins and executing trades. Once you see that you are making a profit constantly, you can then consider using real money.
Keep in mind that the cryptocurrency market is not going anywhere anytime soon so don’t FOMO and execute trades since you can risk losing money as you won’t have the necessary skills yet. A good length of time to train yourself is at least 2-months or when you have successfully completed 100-trades.
The 3 cryptocurrency trading mistakes in this article are a small taste of the information you should learn over your trading career. As mentioned, start with a paper trade account since the best method is going through the process and making mistakes as you go along.
So, what are you waiting for? Start by learning what to avoid when trading. Create a paper trading account, taking action is the best way to learn as you get a taste of the environment you are going into.