5 Silly Mistakes to Avoid as a Crypto Trader.
One moment you learn about cryptocurrency, the next time you’re losing money like crazy. It can be nerve-racking. Still, cryptocurrency is an interesting venture, and currently, its craze is growing like wildfire. As a venture that is gaining so much attraction and acceptance globally, it is done based on sound principles and practices. This applies to all, whether newbies or existing traders. Neglecting these principles can wreck you financially.
Always remember, the crypto market does not forgive even an honest mistake. Fortunes have been made from crypto trading and fortunes have been lost. By following proper trading strategies, you are protected from making silly mistakes that could cost you. As a crypto trader, if you want to make the most of your investment, here are 5 silly mistakes you must avoid.
1. No fundamental analysis
Your first step to formulating a successful trading strategy is through crypto fundamental analysis. Fundamental analysis encompasses the future outlook of a coin, its user community, and real-world applications. It is achieved by reading their whitepapers on sites like CoinMarketCap and CryptoCompare. With fundamental analysis, one can easily detect if a coin is overpriced or underpriced. Whether a project will succeed or fail depends on how well you research the project and that is what fundamental analysis aims to achieve.
2. No trading plan
A trading plan includes your entry and exit point in a trade. In simple terms, the time a buyer buys a certain coin and the time he sells it off for profit. A trading plan also entails the kind of trader you want to be. For example, you might want to be a day trader —buying a coin and selling it on the same day or in less than a week. Or you want to be a long-term trader —hodling a coin for months or years. With a trading plan, you are specific about your profit. It keeps you in check and eliminates emotion from your trading. Whether a day trader or a long-term trader, always have an entry and exit point. Traders who lack a concrete trading plan are likely to lose a chunk of money.
3. Trading out of frustration
Trading out of frustration is often triggered by losses. In trading, losses are inevitable. If you lose trades in a row, take a break and re-strategize. Trading back to back never recovers losses. However, it leaves you frustrated and sad. As a crypto trader, you must accept losses as much as gains because crypto trading is a risky venture. Successful trading is not done out of frustration. Doing so leaves your trade at a dead loss.
4. Using margin too soon
Margin trading is borrowing money from an exchange and using it to make a trade. In a nutshell, margin trading in cryptocurrency could bring more profits. However, margin trading poses higher risks than regular trading due to the volatility of cryptocurrencies. This kind of trading requires a vast knowledge of technical analysis. Traders who lack the basic skill required for such trading can lose both profits and capital.
5. Relying on luck
There is no such thing as lucky trading. Profitable trading requires skills and knowledge. Acquiring crypto skills goes pari passu with conducting your research. People who think profitable trading is more by accident than design lose more money than expected. We already developed the Trade and Make Money Course to help you acquire a profitable trading skill that will last a lifetime.
Another silly mistake you should avoid is the lack of knowledge of cryptocurrencies and the market. Ignorance will always expose you to loss.
Whether you’re just starting out with cryptocurrencies or you’ve been in the game for some time now, we have an upcoming webinar titled What You Need to Know Before Investing in Crypto in 2022 on the 1st of May 2022. Do not miss out. Register here