Trading (trading on the exchange with cryptocurrencies, including bitcoin) is a type of activity that involves work to extract profits from the trading process. As in any other kind of activity, in trading, it is essential to develop specific qualities necessary for achieving high competence, in particular, an analytical mind and attentiveness.
Many come to the crypto-exchange, hoping to earn on a difference in the exchange rate quickly with minimal effort. However, reality makes its adjustments, and a novice trader may soon be disappointed in this kind of activity. Why is this happening? What mistakes must be avoided?
1. Unwillingness to study the situation on your own
Anyway, it is you who will spend your money on buying cryptocurrencies. If you do not understand the product and its value, but only listen to "experts" from Medium, Twitter or Slack, who tell everyone when to buy and sell currency, you will get into big trouble and lose a lot of money.
If your decision to buy a currency depends on the opinion of someone else, then you will have to rely on this opinion and when selling. Do not be a layman. Explore the market in which you work.
2. Putting the money that you can not afford to lose into the trade
As an example, we will bring to the deposit all your available savings, or, especially, loan funds.
Not a single person is insured against failures and mistakes; even professional traders often bear significant financial losses. The stories of newcomers who managed not to make any of the typical mistakes at the beginning of the trade route can be called anomalous, or at least unlikely, with independent trading from scratch.
Mistakes must be made (not intentionally, of course) because learning from their mistakes is much more effective than on others - this is a characteristic feature of acquiring practical knowledge. The best thing you can do before the start of exchange trading is to minimize the consequences of initial errors in advance. The rest will come with time.
3.Following excitement, emotions and unconfirmed information in decision-making
Admittedly, avoiding this mistake can be difficult, especially if you follow the news from the world of cryptocurrency on Twitter with messages like "ABOUT THE LORD, THE COURSE IS GROWING ALL BUYING" or "So it seems that bitcoin has come to an end, it's better to sell."
Let there be some truth in these reports; it is physically impossible to follow everything at once and, in general, the most patient ones still win.
No one in Telegram chats will spread REAL insiders (private information about the prospects of pricing); moreover, even advertised paid channels often give more erroneous information than true. Rely primarily on your experience and recheck the incoming data. And, if you have a plan of action, thought out in advance, it can be fatal to depart from it by shifting moods.
4. Sales at peak prices
"This is not the maximum, hold and do not sell," advised experienced investors. The point is that you never know how much a particular token will grow.
For example, if you bought bitcoin for $ 100, you probably experienced an incredible desire to sell it when it jumped to $ 1000. But today you would have regretted it a lot: the ether is already trading above $ 9,000.
For selling cryptocurrency, you need a strategy. Set a goal and strive for it, no matter what. Yes, with the fall of the market it will be incredibly difficult to look at how money flows. But is it worth to panic and sell everything at once? The answer is one: no.
5. Buying cheap coins
Even before investing funds, it is clear how the currency will develop. If this is not a risky investment, then it is necessary to calculate what the result will be from the investment. A coin can develop, but it can be a fraud.
You can not invest money in currency, just because it is cheap. Many inexperienced users are used to thinking that most of the altcoins with a small price are merely underestimated. This is because there are already many stories of sudden growth in value. But this is not so - not all of the cryptocurrencies are profitable.
6. Security
This, perhaps, is the most serious mistake possible in the crypto- community today. Hundreds of millions of dollars were lost because people entrusted all their data to a stock exchange that was hacked, or to a service that stopped working.
With the development of technology, scammers and hackers do not stand still and where money is free, without sufficient control, those sin for them not to take. Even if you have a little money now, and even if you did not plan to stay in the trade for a long time, you should carefully approach the security of your data: two-factor authentication, use of individual computers, data encryption - are mandatory.
And, of course, make physical copies of data.
You need to write down all your passwords, secret keys, print them and hide in a safe place. Thus, if something happens to your computer, you can restore everything to another device.
7. FOMO
Fear Of Missing Out. It manifests itself in situations such as the early sale of an asset due to fear of losing profits, buying at the maximum because of the feeling that you are missing something important, or the fear of missing a promising ICO, which is why you are investing in dubious projects. It is the fear of losing the profit most often and leads to the fact that we lose profit.
Getting rid of FOMO is difficult, but you can fight it. To do this, create a set of rules for trading on the stock exchange or choosing a project, as well as limits on the possible allowable losses and profits.
Be above it. Understand: new opportunities in the world of cryptocurrencies appear every day, so relax and let this fear recede.
The conclusion
Patience is the key to trading in cryptocurrency. Do not be afraid to miss any deal - the market is so big and developing that there will be enough money for everyone. However, remember that it is easy to make money on the market, but it's hard to keep what you have earned. Do not let greed and greed get over yourself. I will repeat once again: there will always be cryptocurrency, ready to fly like a rocket!