The world of crypto trading is relatively new and comes with so many positives as well as negatives. Trading in crypto can entice anyone with its potential gains and the quickness in which you can achieve your goals but be very aware of the high risks crypto trading has.
One needs to understand the whole crypto world and its laws to be with it along with the significant risks involved. Please don’t take it lightly and jump headfirst into crypto trading without having any understanding of it.
Here are a few common mistakes that one should avoid in crypto trading.
- Jumping straight in with real money.
Trading is a skill that, like every other skill, demands patience and practice to become a master of it. The Crypto market is volatile in nature. Hence going in with your money is not a very wise move for someone who has no experience in trading. You can try trading stimulators to become a master of crypto trading without losing any money. Take your time, sharpen your paper trading skills, and only enter the market with real money that you can afford to lose when you feel ready to do so.
- Not thinking long-term.
The Crypto world is highly volatile in nature. It can shoot up one minute and can dive to its lowest the very next. You don’t want that volatility to affect you so much. Hence the long-term game is the one for you. Have a plan and goal for investing in crypto that will help you analyze your growth better. Please do not take crypto trading as a sprint because it is a marathon. Run for a longer time, and it may help you reach your decided goal for trading.
- Taking a platform that has a high brokerage fee
A brokerage fee is that extra fee that your cryptocurrency exchange adds for the trading. High brokerage fees can eat up a large portion of your profits. To counter this, choose a reputable Crypto-Trading Exchange platform that has a minimum brokerage fee so that you can trade there if you wish.
- Not knowing about the coins.
When they start trading, many newbies buy a bunch of popular coins without analyzing or knowing anything about them. This way, they can possibly earn some profits for a short time, but it’s risky. Carry out an analysis of the coin you want to trade. Know about its future prospects, how it works, the token economy, and whether or not it aligns with your future goals.
- Trading with too many coins
Yes, everyone says that you should diversify your portfolio, but too many coins may also be bad for some people’s portfolio. If you are a beginner, you may want to stick with one or two pairs for your initial trading to sharpen your skills. The Crypto trading ecosystem is not going anywhere. You are not going to miss out on something amazing. Take your time and trade with some experience.
- Don’t invest the money you cannot lose.
There we have said it. Just do not invest the money you cannot lose in crypto trading. This market is ranking one in terms of volatility, do not invest even in the relatively safer coins as they can also show a dip. Just understand all the risks involved and measure your risk tolerance.
- Ignoring the risk management
There is a risk management tool in every platform where you can fix your profits and losses. Stop-loss can help you reduce the losses when the coin goes down. A stop loss is a price where you can buy or sell once the coin reaches that price. As the coin dips below the price you have set, your share would be sold, and this way, you can minimize the losses. Fix it at an appropriate point. You do not want a much higher price, and at the same time, you don’t want much less too.
Don’t let the FOMO get to you. The whole world is trading crypto, and you want to too, but take some time and hone your trading skills. You can reach your goals, but recovering heavy losses is not an easy thing to do.
Self-confessed Forex Geek spending my days researching and testing everything forex related. I have many years of experience in the forex industry having reviewed thousands of forex robots, brokers, strategies, courses and more. I share my knowledge with you for free to help you learn more about the crazy world of forex trading! Read more about me.