The crypto market is highly volatile by nature. Trading there can quickly generate large sums of money, but serious losses are also possible, which can bring you back to square one, or even let you fall into the debt trap. In order to minimize this risk as much as possible, there are some mistakes that you should avoid when buying one of the numerous cryptocurrencies such as Bitcoin, Litecoin, or Ethereum.
Mistake #1: Having No Strategy
A major mistake in crypto trading is the lack of strategy. Before you enter the crypto market, you should have clarified the general conditions for yourself. This includes the capital to be used, the time frame, a goal, and an emergency exit plan.
Mistake #2: Relying on Hearsay
Have you picked up a hot tip and want to implement it immediately? If the answer was yes, you just made mistake #2. Regardless of whether they are work colleagues, friends, or YouTubers, you shouldn’t rely on their advice – especially not if you don’t understand a lot about the subject yourself. Find out more, familiarize yourself with the courses and work out your own strategy. That way, in the long run, you’ll get better driving than blindly following someone.
Mistake #3: Acting too Risky
As mentioned at the beginning, the crypto market is highly volatile. So it’s easy to fall deep when you’re risking a lot. As a general rule, only invest as much as you can afford to lose. Beginners, in particular, should also carefully weigh up trading with small altcoins, as these can be associated with high profits, but also involve significantly more risk than, for example, Bitcoin.
Mistake #4: Buying or Selling at the Wrong Time
When a cryptocurrency is experiencing an upswing, many newbies tend to jump on the bandwagon and invest. Here, however, the utmost caution is to not buy high and sell low later. On the other hand, there is also the widespread phenomenon that selling high is made as soon as price crash. In such cases, selling prematurely turns into a loss in hopes of preventing even greater financial losses. It is better to do the opposite: buy when the rate is low and sell when the rate is high (at least part of it).
Mistake #5: Only Betting on One Option
This mistake is not universal, so with the big cryptos like Bitcoin or Ethereum it doesn’t have to be bad to focus exclusively on these, after all, both have a big impact on how the rest of the market behaves. However, if you are planning a longer-term trade in which you want to expand your portfolio and also invest in smaller altcoins, you should also rely on more stable crypto assets as compensation.
Mistake #6: Falling Victim to Fraud
Unfortunately, crypto crimes are no longer an exception these days. On social platforms, forums, and other places on the net, fraudsters ask the ignorants to send cryptocurrencies with the promise to skillfully multiply them. Beware of this and never get involved in dubious trades!
Conclusion: Crypto Trading is “Brain Work”
Trading in crypto should never be done on the side. A proper strategy and knowledge are required in order to be able to achieve long-term success. At the same time, it is important to only approach the matter with your head and to ignore emotions. Especially with strong price fluctuations, many tend to act impulsively, which is the biggest mistake in crypto trading.