Cryptocurrency trading has become really popular these days, with more and more people trying their luck and hoping to make it big. Some traders do make it big, but it usually takes a long time and a lot of patience to finally reach their goal. Meanwhile, others are just happy and contented to get their investments back. No, definitely not the bunch you want to hang out with.
The fact is that crypto trading is not as easy as it looks, and there are inherent risks that traders need to face. Whether you’re a newbie or a seasoned crypto trader, make sure not to get ahead of yourself. As mentioned time and again, cryptocurrencies are relatively volatile and drastic price shifts can take place several times a day.
Just when you thought you had everything figured out to speculate market movements, sudden factors like media coverage and buyer perception enter the scene resulting in massive shifts you never thought would be possible. To make matters worse, a lot of traders make horrible decisions when facing these situations, leading to the demise of their crypto trading goals.
Avoid These Costly Crypto Trading Mistakes
To make sure you only have the cryptocurrencies price shifts to worry about, beware of these common crypto trading mistakes:
- You Fail to Do Your Homework
The problem with some traders is that they jump headfirst into buying currencies without learning any of the important details. Make sure you understand the product and the value of what you intend to do. Learn the technology behind the exchanges so you can fully comprehend what takes place behind the scenes.
- You Don’t Have a Plan
Before you begin trading, figure out how long you are planning to trade. There are generally two types: a short-term plan and a long-term plan. Depending on which timeframe you choose, you can have a plan on what to do and what not to do. That way you can know if you want to HODL or let go of your crypto investments at any given time.
- You Don’t Keep Track
One of the many things you will learn while doing crypto trading is to track everything you do. Remember or record information that has anything to do with your trading. If you’re new to things, expect to make a few mistakes along the way. What makes all the difference is learning from your mistakes by analyzing what you did in the past.
- You Get Swayed Easily
It is true that cryptocurrencies are volatile, and they are subject to price shifts every now and then. However, some of these shifts may be carefully planned. Shilling is common in forums and social media sites to generate hype and force traders into buying or selling cryptocurrencies. When traders suffer from FOMO, their emotions get the best of them. Know better and study the market first before jumping the gun.
- You Fail to Secure your Account Keys
Another common mistake newbie traders commit is failure to secure their keys. Be familiar with your keys and be sure to get a secure wallet where you can store it. There are a variety of choices for a crypto wallet but the most secure ones are usually stored on hardware that can’t be stolen over the Internet.
- You Think You’ll Get Rich Easily
This is a big NO, whether you are talking about crypto trading or stock trading. No one gets rich easily. The ones that do get rich in these industries have a few things in common: they waited, they had a strategy and backup plan, and they implemented those strategies.
- You Fall for Scams
This mistake may be too simple, but there are still traders who get caught in these schemes. The rule of thumb is “if it’s too good to be true, then it probably isn’t.” Most people who get scammed are those who are too lazy to actually work for it.
Don’t Stop Learning
Similar to stock trading, getting started in crypto trading is easy, but learning the nitty-gritty takes time, and lots of planning. While you can always be ambitious with your goals, be practical and methodological as well. Study the trends and market changes, and never settle for shortcuts.
Then, set a time when you can lay everything out – from where you’d get your funds, to how you would spend your earnings. Planning is crucial to the success of every crypto trading journey. Just as author Alan Lakein said, “If you are failing to plan, you are planning to fail.”
Finally, read plenty of resources, both online and offline, to know more about the market and cryptocurrencies in general. Never consider educating yourself as a waste of time. Join crypto forums and communities, and listen to success stories taking note of failures and mistakes you need to avoid.
If you want to get a solid understanding of everything crypto, stay tuned here at Noah Coin blog to get the latest news and updates in the market.