What Are The Main Crypto Trading Mistakes To Avoid?

May 15, 2023

Today, cryptocurrency is a reliable investment. Many traders earn on the difference in exchange rates.

Analysis of the cryptocurrency market helps them to make the most accurate predictions on the rise of cryptocurrency. Can only traders understand this issue? No, anyone can study the cryptocurrency market and learn how to trade crypto futures for profit. To do this, one needs to explore scientific articles on the cryptocurrency market, follow the latest changes in electronic money, and so on. In this article, we will take a detailed look at the mistakes that novice traders make. This will allow you to understand more accurately the intricacies of investing in cryptocurrency.

Crypto Trading Mistakes Most Beginners Do

Continually trading crypto for beginners is a highly complex process. You need to study a lot of information to minimize the risks of investing. Information is tough to absorb at the initial stage. But don’t be afraid to invest in cryptocurrency! Detailed analysis of crypto mistakes will help you better understand the cryptocurrency market.

Mistake 1

The most common mistake among novice traders is investing without studying the cryptocurrency market. That is, you need to study popular and stable coins today. Exchange websites have detailed information about the latest changes in cryptocurrency over a certain time. For example, the home page of WhiteBit shows the dynamics of virtual coins’ price changes. The information is updated daily. And every trader can identify the pattern of such changes. This is the primary analysis of the cryptocurrency market.

Mistake 2

Lack of strategy. If you want to start trading cryptocurrency, think carefully about your goals, how long you want to achieve them, and how much money you want to invest in them. You should also learn how the market works and consider an exit strategy in an emergency—having a plan for when to sell which crypto-asset can protect you from total loss.

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Mistake 3

You are choosing the wrong wallet. Choosing the right wallet is critical to keeping your BTC safe. There are different types of wallets such as hot, cold, and paper wallets. You should carefully consider which wallet best suits your needs.

Mistake 4 

Losing money because of a stupid translation mistake. Yes, yes. It happens! If you accidentally transfer bitcoins to your NAVCoin wallet, your funds will get lost in the blockchain. Then there’s no point in asking your cryptocurrency broker for help or filing a fraud complaint. You alone are responsible for your cryptocurrency transfers. So make sure you make sure everything is correct.

Reminder: some cryptocurrency transfers (problems with ether transfers) use “smart contracts.” Inevitably, not all sites are built around these “smart contracts,” so there may be functional problems. So do your research before making a wallet-to-wallet transfer.

Mistake 5

Holding on to Bitcoin or Ethereum when reselling altcoin. For some investors, it is too tedious and difficult to go around using fiat currency (euros) when reselling altcoins. Instead, when they resell altcoin, they return (and stay in position) to Bitcoin or Ethereum. Problem: Bitcoin continues to fluctuate. Capital gains from a resale of altcoin may result in a loss of capital if the funds are held in Bitcoin.

Note: So far, these investors have never had to complain about the price of Bitcoin. It has always continued to rise. Increases in altcoin capital lead to even more significant increases in the value of Bitcoins.

In short, if you make capital gains or losses from reselling altcoin, you don’t stay in Bitcoin (or Ethereum). Transfer those bitcoins (Ethereum) to a website/broker/broker that will allow you to convert them to euros (or dollars).

Mistake 6

The belief that cryptocurrencies will only grow (and will continue to grow).

Oh yes, I have to get rid of it! We are still determining exactly what these cryptocurrencies have in store for us. So be careful: take your winnings occasionally and send them to your bank account in euros. The same applies to ICOs: the assumption that all cryptocurrencies will necessarily grow 10 or even 100 times after listing is simply wrong! Some ICOs will sooner or later dissolve into thin air.

Mistake 7

Only invest what you can afford to lose. Another rule of thumb for risk management is to invest only what you can afford to lose. Since the cryptocurrency market is very volatile, you can never know what will happen. Therefore, before you invest all your savings in cryptocurrency, you should consider how much you are willing to lose. That is, you need to understand that cryptocurrency is an unstable investment. If you calculate correctly, you can retain all your invested money. 

Mistake 8

Don’t buy at a high price. Many investors tend to act emotionally. If prices increase, many think they should join the victory and buy or buy more. People like to sell their stocks in a panic when cryptocurrency falls, but this is completely wrong. It’s better to buy when the price is low. Find out in advance about the annual development of the cryptocurrency you want to invest in and make a decision based on sound research.

Mistake 9

Lack of attention to fundamental analysis. Fundamental analysis is an essential method of evaluating cryptocurrencies. It is about understanding the underlying factors that affect the price of a cryptocurrency. If you don’t consider these factors, making meaningful trading decisions can be difficult. The analysis is a guarantee of investment success. Since there is no need to rush in this direction, sometimes it can take several weeks to get the complete information.

Main crypto trading rules to follow

There are crypto trading rules that help you succeed in your investments. As a rule, they are adhered to by the majority of investors. The first and most important rule is market analysis. This has already been mentioned before in investor mistakes. You can only invest in cryptocurrency with a detailed comment! This should be remembered. It is better to spend a little more time studying the market and its analysis than to invest a large sum of money in the currency and then lose it. You need to evaluate several factors when buying a particular coin or token. The stated goals and objectives of the project, as well as its market capitalization, trading volume, and usefulness of the coins, are the most important considerations. Future growth is questionable if a token has a deficient trading volume and few substantial uses.

The second rule is to be mindful of possible risks. Buying will only sometimes be profitable. In some cases, you can lose much more than you invest. That’s why every investor must be prepared to lose the coin or token purchased. Do your own research, relying solely on your experience and the information you have studied, because advice from outside will only sometimes bring a positive result. Today there is a lot of information about the types of analysis and how to apply it to achieve profits. 

Another important rule is not to panic because investments in the long term are not always stable. What does this mean? For example, you invested in a particular cryptocurrency, and it fell in value a few months later. But your investment was not short-term, and you want to benefit after a certain period. But such fluctuations can cause a certain amount of anxiety. Some investors start to panic and withdraw funds from their accounts. You need to assess your position and situation to prevent this from happening. Once again, analyze the cryptocurrency market, apply several analyses, and predict the final result.  

Try day trading crypto for beginners to evaluate your options. This will help you understand more about the cryptocurrency market and watch and learn to analyze the dynamics of coins and tokens. For beginning investors, it is recommended to invest a small amount of money. This way, you can practice on deposits, get acquainted with the exchange, and watch the fluctuations. Later you can invest not only in one virtual coin but in several simultaneously. Investors use Bitsgap to make trading cryptocurrencies easy, efficient, and stress-free. For traders with any experience.

The main thing to remember is that the cryptocurrency market is a modern way to invest and earn. But it is not an easy way, where you can increase your income by several tens of times. It is a complicated way that requires an investor’s time and effort to study the cryptocurrency market. Show patience in this business and take your time choosing a coin and making a significant investment in it! 

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