Getting into cryptocurrencies today can be confusing. Not only is it unregulated but no one knows what is going on. If you ask someone why the price is going down or going up, the answer will almost be speculative. Most people are not aware of what is going, nevertheless understanding the crypto markets. Being a new newbie or a rookie to cryptocurrencies is something almost everyone goes through. Here are 4 most common mistakes to avoid as a beginner in crypto trading.
- Improper knowledge
The most common mistake that people do is that they get involved into the cryptocurrency by a MLM trader. They invest big without knowing exactly how cryptocurrency works. People who get into crypto often don’t do proper research before investigating into an Coin or into an ICO. They don’t read the “White Paper” of the coin.They don’t research about the technology and the team. People also don’t keep them up to date by the latest news and because of this they often miss out the profit opportunities as well as including huge loses.
- Following Trades Blindly
The crypto world is an unpredictable world, and profit-making with blind trading might push your luck only a little far. Then it’s all about how you strategize your buying and selling, and how you manage your portfolio. Before investing or trading, its best to do complete market research on your coins, make a portfolio of coins that are compatible with each other and spread the risk, consider future trends, and prepare for losses in advance. Having a formidable strategy might dampen the volatility of cryptos.
- Everything In one Trade
A very common mistake beginners make is spending all their trading money in one go. If you find a good entry, you should buy in with a percentage of your funds (50% – 60%) and hold the rest to see whether your entry works. This way, even if a coin drops following your purchase, you can average it down by buying more at the dip. Similarly, if the uptrend continues, you can always buy more, and even though this approach reduces your profit margins, it secures your position and prevents you from being all-in on a trade that goes south.
- Over Trading
Having patience is a constant recommendation in this market. Psychologically it can be very demanding, especially when a vortex of emotions that revolve around a price that from one day to the next can make you smile or cry. The extremely fast paced nature of the crypto market makes over trading one of the worst mistakes a trader can make. Over trading leaves traders maxed out, stressed, and trying to achieve too much in a single day.
So these are the few mistakes beginners should watch out for always be careful. It is a very volatile market, only invest what can you can afford to loose.