New traders often make the same mistakes that are made in other financial markets. But crypto trading is still a relatively new field. That means there are also some undiscovered traps out there just waiting for you to step into them.
We’re going to show you eight of the most common mistakes experienced crypto traders make, and how to avoid them.
1. The first mistake is one you’re probably making right now: reading this article instead of trading. The best way to learn anything is by doing it, so if you haven’t already, go ahead and sign up for an account on Coindirect and start trading today!
2. Making trades based on emotions. Don’t get greedy or desperate. You should never trade because you feel pressured to or because you need money fast. There are many stories of novices throwing everything they have into a trade hoping for a big return, only to watch their life savings disappear when the currency drops in value.
3. Not having a plan before making a trade and not keeping a record of your trades. Before you buy anything with your hard-earned money, make sure you do some research about the currency first, including its history and the market trends around it. Traders who don’t keep track of their trades end
Many people think that crypto trading is extremely complicated, but this is not entirely true. To be a successful trader, you just need to make as few mistakes as possible and learn from them.
When trying to get rid of their bad habits, many traders use the strategy of ‘replacing’ them with good ones. This will most likely not work for you. Why? The reason is that in order to replace a habit, you need to understand it first. After all, it’s much easier to do something right when you know what can go wrong.
In this article, we will talk about the top mistakes that experienced traders make and how you can avoid them.
1. Trading without a plan
Many traders think they don’t need trading plans, because they are experienced enough to react quickly and correctly. However, this is a mistake that can cost you dearly over time. A trading plan helps you to be more disciplined and focused on the trading process itself instead of your emotions and feelings related to it.
2. Ignoring technical analysis
If there are two major approaches in crypto trading: fundamental analysis and technical analysis — why would anyone ignore one of them? In fact, professional traders don’t recommend doing so as these approaches complement each other
If you’ve been trading crypto for a while now, you’ve probably suffered more than a few losses. Sometimes they were tiny, other times they were downright catastrophic. It’s not something to be ashamed of — even the most experienced traders make mistakes. But if you want to trade like a pro and maximize your profits, it’s important to recognize the common pitfalls that all too many people fall into.
In this article, we’ll be looking at seven of the biggest mistakes crypto traders often make so that you can avoid them. Despite the bear market that has persisted throughout 2018, the crypto space is still rife with opportunity. Let’s make sure you don’t miss it!
1. Changing your crypto strategy based on the daily price action:
Many new traders are constantly drawn to short-term opportunities and are constantly adjusting their trading strategy based on the current market conditions. Don’t follow the crowd!
2. Trading on overleveraged platforms:
You’ll never be able to predict with 100% accuracy where prices will go. Trying to do so is a recipe for disaster as you’ll always be wrong at some point. Never trade with more than you can afford to lose!
3. Not doing your own research:
Don’t put your money into a project without taking the time to understand what it offers, who’s behind it and why. If you don’t understand something, don’t invest in it! Never buy into FOMO! Always ask yourself if you could see yourself using that product or service in the future?
4. Trading on emotion:
Emotions have no place when trading crypto. Resist the urge to sell when prices drop or buy when prices rise! Take a step back and reassess your strategy instead of acting on emotions alone!
The crypto market is the wild west of the financial world. You will find a lot of people, who are either new to the market or don’t have a strong grasp on technical analysis, trading on emotion and getting caught in the herd mentality. This can cause them to make mistakes that can lead to severe consequences.
This post is meant to help people avoid some of these pitfalls. In particular, it will focus on mistakes experienced crypto traders make. It will cover three common ones:
– Failure to recognize patterns
– Trying to be right
– Emotional trading
If you are new to crypto, this article is not for you. This article is for experienced crypto traders who have made thousands of trades and are now looking for ways to make the most out of their trading tactics.
This list is not exhaustive, nor does it reflect in any way the professionalism with which I trade. It’s simply a list of mistakes that I’ve seen many fellow crypto traders make over and over again.
1) Not doing research before buying crypto
If you are reading this, then you must be familiar with the term “HODL.” In layman’s terms, HODL means holding on to your coins and not selling them. Many people have seen their net worth multiplied many times over by simply buying a coin and HODLing it without any further research. While this methodology might work in the long run, there can be significant drawbacks if you don’t do your due diligence before spending your money on a coin that’s doomed to fail.
To avoid making an expensive mistake, I suggest doing thorough research before buying a coin. Here are some things to consider:
Is the coin backed by an existing business or organization?
Is there a clear path for mass adoption?
Does the coin aim to solve an actual problem?
1. Not doing your own research
Doing your own research, or DYOR, is a staple of the crypto community. It is the first and most important rule in crypto trading. Don’t take anyone’s word for it – always do your own research. Always take what you read online with a grain of salt. There are so many people on social media that have no idea what they’re talking about but will still try to sell you on a coin because they have some inside knowledge or strong feelings about it. There are also a lot of people who claim to be experts and will try to sell you their DYOR services for a fee. In both cases, such sources should be avoided at all costs.
You should always start by researching what the project is about, who are the founders and developers, when was the project established, when did it ICO/IEO (if it did) and what is its current market cap and price predictions. All this information is out there and it should not take more than an hour of your time to gather all the necessary data to make an informed decision (anything more than that is probably not worth investigating further).
2. Not setting stop-losses
Don’t be greedy – always set stop-losses