Five Common Crypto Mistakes That Could Be Costing You

Five Common Crypto Mistakes That Could Be Costing You

A lot of people in the cryptocurrency world think they know what they’re doing. But if you ask them some questions about crypto trading and the technology behind it. you’ll find out that most are speaking without any real knowledge about the subject. Five Common Crypto Mistakes That Could Be Costing You

That’s why we’ve put together this quick guide to five common mistakes. people make when it comes to crypto investing and trading. along with advice on how to avoid them so you can keep your money safe and sound.

Common Crypto Mistakes

#1: No Trading Strategy

If you have absolutely no trading strategy, what are you even doing 

in crypto? Of course, everything is a tradeoff and an established trading plan can be more rigid. Than is necessary for a riskier asset like cryptocurrencies. 

However, if you're going to dive into crypto at all then it makes sense to take steps. To minimize your risk while maximizing your chances of success. This means that at a minimum you should figure out how much money you're willing to lose. 

Before cutting your losses (know when to walk away). and what price point constitutes too high for each of your purchases. 

But, with crypto it's amplified because there are so many opportunities to get rich quick. While there is certainly value in being able to recognize opportunities. As they arise you need to make sure that you don't let FOMO blind you from seeing potential issues. or risks associated with any given opportunity. 

Being aware of your biases will help keep them under control. and allow you to make better decisions with less emotional influence.

#2: Not Monitoring the Charts

While there are countless different trading strategies that one can utilize. When trading cryptos, most of them fall into a few basic categories. There is no one size fits all approach to crypto trading. so our suggestion would be to follow some proven technical analysis. / chart patterns. 

#1: Not Understanding Market Cap: If you’re new to crypto trading. you’ll have a lot of trouble understanding market cap right off the bat. Simply put, it’s just a fancy way of saying how much money is being invested in a particular coin or token. This figure can fluctuate wildly depending on what country you live in. and what exchange you use for your trades. 

#2: Focusing on Only One Coin at a Time: One common mistake. that many traders make is focusing on only one coin at any given time. The truth is that there are thousands upon thousands of coins out there.

#3: Lack of Understanding

It’s easy to get swept up in crypto-mania, with people thinking they’re going to get rich overnight. If you don’t understand what a cryptocurrency is. how it works and how it can help your business or personal life,

Then you could make some costly mistakes. Take your time researching before you make any financial commitments. While you don’t need to be an expert on cryptocurrency trading. 

It will behoove you greatly to learn about cryptocurrencies. like Bitcoin or Ethereum and their underlying blockchain technology. The more you know, the better off you’ll be when making decisions about where to invest your money

#4: Not Learning from Your Mistakes

A common rookie mistake is to make a trade, see that it’s gone south, and move on to something else. Learn from your mistakes by identifying what you did wrong—and why—then don’t do it again.

Taking a few minutes to evaluate each of your trades will help keep you focused. and improve your trading success over time. Remember: If you continue making bad trades over and over again, you’ll never turn them into good ones. 

#1: Not Paying Attention to Your Position Size: This one’s pretty straightforward. When you buy crypto, especially if it’s at an all-time high or near an all-time high. (like we saw in December 2017), consider averaging out your position size. Over a longer period than just one day.

#5: Not Using Stop Loss Orders

A stop loss order is a trade entry order to sell when a security reaches a specific price. The stop-loss trigger price is set below (for long positions) or above (for short positions). Where your trade entry will be placed. If you don’t use a stop loss. it can result in unnecessary losses on your trades and may even cause you to lose all of your investment. 

For example, if you buy Bitcoin at $10,000 and it drops to $9,500 but then rises back up to $11,000. before dropping again down to $8,000—you could have lost money by not using a stop loss.

This is because if you had used a stop loss at $9,500 instead of letting your position ride until it. Reached $8,000—you would have sold at around breakeven rather. Than incurring an additional 50% loss.

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