Similar to any skill, trading is also an art.
The crypto world is pretty unforgiving when it comes to mistakes, honest or not. Before proceeding into the cryptocurrency market, you must avoid these trading mistakes as a beginner and understand them.
As a beginner, if you commit several blunders, it might be a possibility that you never stand back into the crypto world. People have lost fortunes and made fortunes and the crypto market has witnessed it all. The opportunity is for those who view crypto trading as a mind and math game and not for those who look for other ways.
The world’s most prosperous includes traders mostly, who climbed onto the bandwagon by strategically trading and reducing their losses.
Mistakes Made in the Crypto World:
You can minimize losses; the basic is for you to understand crypto trade like a system and avoid mistakes of the past.
- Using real money for trade instead of paper trading at the beginning
Similar to any skill, trading is also an art. To master the art of trading, you must put in hours and hours of training. The primary ground rule of crypto trading is to use paper trading instead of directly putting in real money. Ian Mausner says, in the beginning, paper trading may seem boring for a few; however, it is one of the most legal aspects of crypto trading. As a trader, you must remember that the crypto market is here to stay. If you consider paper-trading for a few months, you will not lose anything. Therefore, it is best to prepare yourself to ensure success in the actual money trade by trading with crypto paper in the beginning.
- Not utilizing a risk management feature
You can reduce the losses incurred when the crypto-trade goes down; it is best to utilize a risk management feature. For risk management, a loss is quintessential. Irrespective of how sure you are of your trade going the correct path, not utilizing a risk management feature is one of the most terrible mistakes you can make. Most crypto exchanges provide a feature for risk management. It offers to set up the stop-loss feature.
- Not using a broker with low trading fees
Most often, high trading payment eats up a large part of your trading surplus. Ian Mausner recommends opting for a broker that provides low-cost trading but has high liquidity and volume. Thus, if you follow this, you can make more money through trading.
- Not having a percentage view for profit and loss
Woman using cryptocurrency app; image by CoinView App, via Unsplash.com.
One of the most widespread mistakes that novice traders commit is not viewing their profits and losses through a percentage. They view it as a total gain. It is essential to consider your trading gains like a percentage refinement. It will enable you to have a clear view of your profit as well as your loss.
- Not going through a fundamental analysis
Many amateurs begin trading by choosing a popular cryptocurrency and start selling. For a long time, you might even make a fortune out of it. But there is a possibility that the coin might dump, leaving your portfolio with a significant loss for a very long time. Therefore, to avoid this beginner mistake, Ian Mausner suggests doing a fundamental analysis on the different cryptocurrencies you want to trade in.
Mistakes happen, even when you are careful at the most. But it is best to acknowledge and learn from your mistakes.
Join the conversation!