10 Common Mistakes Beginner Cryptocurrency Traders Do
Trading in cryptos is profiting if done right, or you can lose their capital easily. The best and most helpful mantra for investing is, “Only invest what you can afford to lose.”
The crypto space is like a fairy tale, all get attracted very soon with the glittery gains of the market. The newbies in the crypto market often tend to play the same moves as the experienced traders. But do they succeed and make enough gains?
Well, let’s check it out.
An Introduction to Crypto Space
The people who want to make money easily and at lightning speed often look at different options. Among the various options, the cryptocurrency trading or staking may also be included. In many cases, the new traders without strong knowledge tend to lose all their earnings.
Common Mistakes a Newbie Crypto Trader Do!
Not building a strong base
Knowledge is such a treasure which cannot be stolen nor let out. So building such a treasure is the first and foremost thing any beginner needs to do in case of planning any investment.
But some of the new traders fail to do so. Only by going through word of mouth or by following any trader, the newbie often invests in the assets without having a proper knowledge of the market.
This type of investment often leads to a loss of funds, in some cases the whole investment may turn into loss with a blink of the eyes.
Investing without doing proper research
In case, the trader has gathered a pretty good knowledge about the market and its movements, it is still important to know in depth information about the asset you want to invest in.
The new trader often fails to conduct a deep research on the asset, its previous performance, the pump and dump and its reasons, etc. This may also attract losses to your funds in case you have invested in non-performing assets or scams.
Getting Scared of Market Volatility
The crypto market often is termed as volatile as the price fluctuate every single second. The seasoned traders are used to the market behaviour and upon their knowledge and past experience, tend to make profits from the dump also.
On the contrary, the new traders get tense with every dump and may take improper decisions being scared of the market volatility.
FOMO Trading and FUD
The most happening mistake the new traders make is the FOMO trading and FUD. FOMO generally means Fear Of Missing Out. Here, whenever the market is about to shoot up, the traders having the feeling of missing the opportunity, just grabs the asset without having another thought.
In other cases, FUD is abbreviated as Fear Uncertainty Doubt. It all happens when some negative rounds of news or blog just spreads over the market which creates a negative impact on the traders.
Not Building Clear Strategy
Seasoned traders often with their experience build a strong strategy which help them play safe in case of a bearish trend. Often they do share their strategies but the new bies often fail to do so.
Without having any goal or a strong strategy, no success or profit can be minted. This needs to be given the prime focus before investing in any asset in any market.
Not Maintaining Key Phrase
Maintaining a key phrase or storing them in a secured way are always considered a sign of a good trader. Therefore securing passwords or keyphrases and transferring to the proper address needs to be a good practise.
Flow By The Trend
With any uptrend or downtrend, most of the traders often set a ‘Buy’ trend or a ‘Sell’ trend. A good trader often does not get carried away with the trend set by whales or a seasoned trader. But always do his own research and go by his trend.
Fall in Traps
Without having a proper knowledge, the new traders often tend to fall in the trap of the ponzi schemes or scams or non-profitable investments. It is suggested that a trader needs to understand the people behind the project, the whitepaper, the working and the benefits of the project and later move ahead with any investment.
Being Very Impatient
Patience is one of the strongest weapons anyone can possess. For any returns, you need to have ample patience. 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
The crypto market tends to touch the rock bottom prices within a fraction of seconds. And hence this creates a big panic among the traders who tend to immediately sell off their holding without a second and a patient thought.
Therefore, a trader needs to be patient as mentioned earlier, and save himself from doing any panic selling.