Crypto Trading For Beginners: 5 Mistakes To Avoid
The beautiful world of cryptocurrency has opened up a whole new reservoir for investors to play around with. With the market value expected to reach $1 trillion in 2018, you can expect even more wonderful opportunities to invest in. However, it's not all rainbows and unicorns. There is a dark side to this market that prays on the weak and inexperienced. So if you're new to this game, here are five key facts to avoid.
CRYPTO TRADING MISTAKES: NOT DOING RESEARCH
Simply following a promising project's social media channels is not enough. In the cryptocurrency world, scammers use social media of all sorts to promote their fake coins and advertise fraudulent ICOs just to steal your money. Hence, you should never just listen to people. Roll up your sleeves and dig in. Do your own research at all levels of the organization. If any red flags come up, then it's time to pull out.
CRYPTO TRADING MISTAKES: PANIC AT THE BOTTOM
Listen. This is not the NYSE exchange. The crypto market is volatile. Extremely volatile. There will be times when the price rises so high and so fast, you won't even know what to do with all your excitement. Alternatively, there will be times when it feels like the entire market is imploding on itself. It's especially important to be patient during these moments. Don't panic sell when it all hits rock bottom and don't just buy when it's at the top. This sort of behavior guarantees you will lose money
CRYPTO TRADING MISTAKES: NOT DIVERSIFYING
If you have experience trading in traditional markets, then you know this rule already. It's never good to put all your money on one cryptocurrency or blockchain related project. Even if it looks incredibly promising, there are no guarantees in this market. So diversify and manage your risk appropriately. Find good entry points on a few different coins to expand your portfolio and increase your chance of profiting.
CRYPTO TRADING MISTAKES: NOT HAVING AN EXIT PLAN
Let's say you found a promising investment that you got in at the early stage. The price is going up and you're thinking of selling. However, you hold on a little too long and now, you lost your profits. Maybe you can hold on a little longer and break even but this would have been much easier if you had the next plan, to begin with.
CRYPTO TRADING MISTAKES: NOT FOLLOWING THE NEWS
The cryptocurrency market changes faster than you can imagine and you are no fortune teller. It seems like a lot of work, but it's essential to stay updated on the latest news on your favorite platforms. An informed investor is a wealthy investor.