As the crypto market is completely blooming, every trader is looking for a gold rush to make huge profits in the crypto world. I’m sure you’re also among the one looking for the opportunity to make profits overnight.
You might be aware of how volatile the crypto market is and how easily the beginner traders can slip in this trap!!! Before you avoid such mistakes, you have to be aware of which are those mistakes.
Here I present you the list of top 10 cryptocurrency mistakes that every beginner in cryptocurrency should avoid…
1. FOMO trading
FOMO is Fear Of Missing Out, as the name suggests, a trader doesn’t want to miss out on opportunities causing a buy at the top, and then the market crashes, leading to losses.
Fear Uncertainty Doubt, most people read random posts on social media and it breeds doubt, uncertainty leading one to sell their position instead of holding. Exiting early is the biggest mistake crypto beginners make, as they are attracted to every coin out there.
3. Social media trading
The crypto space was small when it all started, now the crypto space has grown exponentially. With the help of social media, everybody talks about cryptos and considers themselves an expert. Following the advice of people on the internet will lead to only one thing, disappointment.
After making a solid buy at the bottom, agitation kicks in, people usually keep checking the price variations every minute and expect it to skyrocket. The stress this causes will override the sane and logical emotions causing you to vacate the position by selling.
5. Revenge trading
Losing a trade doesn’t mean you’ve lost it all if you’ve created the portfolio intelligently enough. But most people after losing a trade, will get into a frenzy and start revenge trading. You might come unscathed a few times, but in the long term, revenge trading will rule out your logical emotions and rage will rule, leading to losses.
6. Gambler’s Fallacy
Just because you’ve traded profits in your previous trades, doesn’t necessarily mean you will win the next one. So it is required of the trader to not get overconfident and go all-in.
7. Entering a trade blindly
Most of the traders enter the trade blindly, what that means is that they just buy-in hoping for a spike or a pump to cash out. And that is why most of the traders lose faith in trading. Every buy-in should have a proper reason behind it. So it is necessary for a trader to learn technical analysis and terms related to it, and to know to set buy-in points and sell-out points.
8. Don’t put all of your eggs in one basket
People usually want to get into the next big thing and hence put all their capital into one coin and lose it when it starts slumping, FUD takes over causing the sell-off, not only does the trader lose their investment but also the trading fees.
9. Pump and Dump
Never get into a pump and dump scheme. Most of the time you expect to get into a pump and dump scheme expecting to make huge profits, but by the time you read the notifications and get into it, it is already high, and a bad time to buy. The people behind the scheme would have already sold their coins and made a profit, leaving you high and dry.
10. Not doing enough research
Following others and hoping for tidbits from them is a wrong thing to do. People always have opinions about things, and following their opinion is going to cost you. Do thorough research about the coins you are going to get into, blindly buying coins would cause more loss than profit.
Due to this high unpredictability, the cryptocurrency traders are more likely to lose than win if they do not trade carefully. Once you have entered this crypto world it is your responsibility to do proper research and analysis of the market. So it is always better to analyze properly before you make any huge investments.
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