Out of so many other mistakes, there are seven common mistakes crypto investors and traders make that turn back to hurt them always.
I am talking about both experienced and inexperienced crypto investors and traders.
I was also making some of these mistakes in the past, but that was before learning the hard way.
If I am being honest, I wish I read a post like this, it would have saved me from some unnecessary losses I suffered in the past.
These mistakes may have cost you a lot already, but they will cost you even more in the future if not corrected.
The good part is you don’t have to spend money to correct them.
Seven Common Mistakes Crypto Investors and Traders Make
These are some common crypto mistakes you should avoid.
1. Not Using the Stop-Loss feature
There is a reason why the stop loss feature was created, and not using it is one of the most common mistakes that crypto investors and traders make, while others set it up incorrectly.
If you are hearing about stop loss for the first time, a stop loss is a trading order that is placed to sell a cryptocurrency when it reaches a certain price, regardless of if you are online at the moment or not.
The purpose of a stop loss is to limit potential losses in a trade by automatically selling the crypto if its price falls below a specified level.
It is a feature used by traders to prevent losing money.
Because it doesn’t matter how good you are, no trader wins 100% of the trades they enter, and the best traders know it.
Besides that, the cryptocurrency market is highly volatile and it doesn’t send out warnings when a crash is coming.
Note: it is much better to take a $500 loss during a market downturn than to lose $5,000 or even more.
2. Trading in a Crypto Exchange that is not Trustworthy
Another common mistake is using a crypto exchange that is not trustworthy.
We have so many crypto exchanges nowadays.
But while some of these exchanges are trustworthy, you should know that some are not.
And with the biggest celebrities and influencers promoting them to get paid, it becomes difficult for traders to know the one that is trustworthy and the one that is not.
Sadly, millions of customers have lost their hard-earned money deposited into these fraudulent crypto exchanges that disappeared overnight with customers’ funds and exchanges that stopped operating after getting hacked.
This makes it important to thoroughly research and choose a reputable and trustworthy exchange to trade on, unless you don’t care what will happen to your funds if your exchange is shot down today.
You should read my post on how to choose a crypto exchange.
You can also check out my recommended crypto exchanges below:
Coinbase
3. Following Crypto Signals Blindly
Another mistake that is common among crypto investors and traders is blindly following crypto signals.
I have even received many emails asking if I provide crypto signals.
Well, I don’t.
I will rather show you how to read candlesticks easily, the indicators to use, and how to spot a working pattern on your own because you can do it.
But if you go on trusting these trading signals, then you might end up losing more than you will ever gain.
So, don’t make the same mistake, instead consider trading signals as indicators and not actual trade.
4. Leaving all your Coins in One Exchange
Another mistake I see crypto traders and investors make is leaving all their coins in one crypto exchange, thereby losing everything when the exchange has a problem.
It has happened before, and it will happen again.
It doesn’t matter how secure the crypto exchange is or how much you trust them. To leave all your coins in one exchange is a risk that no one should take.
So, if all your funds are in one crypto exchange then it is time to act.
Move them to at least two crypto exchanges and a crypto hardware wallet.
That way, if one exchange is shot down, you will not lose everything.
Even the best hardware wallets today are inexpensive, yet they give you 100% control of your coins and the type of security no crypto exchange can provide.
[READ: The Best Crypto Hardware Wallet for Storing Crypto Offline]
5. Trading without a Strategy
Another common mistake is trading without a strategy.
It is a risky and ineffective approach to the cryptocurrency market and is often referred to as “gambling” rather than actual trading.
This type of approach is based on emotions such as hope, fear, or greed, and is often made impulsively without considering market trends, market conditions, or other important factors.
This can be a recipe for disaster.
To be a successful trader, you must develop a trading strategy based on research, analysis, and a sound understanding of the market before entering into any trades.
6. Failing to do Proper Research
Another common mistake crypto investors and traders make is not doing proper research.
Many people jump into the crypto market without thoroughly researching the coins they’re investing in or the technology behind them.
This can have consequences such as:
1. Investment in Scams: Without proper research, it is possible to invest in fraudulent schemes disguised as legitimate cryptocurrency projects.
2. Overvaluation: Poor research may lead to overvaluing a cryptocurrency and investing too much money, leading to a significant financial loss when the bubble bursts.
The last thing you want is to get caught up in the hype of a particular coin, investing too heavily, only to see your investments lose value soon after.
Therefore, it is crucial to conduct thorough research before investing in cryptocurrency, including understanding the technology, reviewing the development team, and analyzing market trends.
[READ: How to Secure your Crypto from Being Stolen]
7. Not Diversifying your Portfolio
One more mistake among crypto investors and traders is putting all your investments in one asset.
Many crypto investors only hold one or two cryptocurrencies, which can lead to significant losses if those coins suffer a downturn.
You should never do the same. Instead, diversify your cryptocurrency portfolio and invest in several different coins.
It reduces your risk of losing everything if one of these investments turns bad, while also giving you a higher chance of making a profit, especially when one of your coins or more take off in a similar way to Dogecoin and Shiba Inu coin.
Conclusion
These are the seven common mistakes crypto investors and traders make.
But that’s not all, you must also watch out for FOMO, put your emotions in check, and never invest more than you can afford to lose.
It will also be worth it to invest time in free resources or even investing money into understanding crypto, rather than listening to some expert tell you what to buy, when to buy, and when to sell.
I hope you found the post helpful.
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You should also check out other content from us below to learn and understand Bitcoin and the cryptocurrency market better.
read also:
- The 3 Safest Stablecoins to Use
- Top Tips on How To Avoid Crypto Scams
- Important Things to Know Before Investing in Cryptocurrency
IMPORTANT; you must never send money to anyone you meet online asking to help you invest in cryptocurrency. They are scammers. Crypto is easy, and you can do it all by yourself.
DISCLAIMER:
The information presented here should not be used as the sole basis of any investment decisions, nor should it be construed as financial, tax, legal, or accounting advice. I will also advise that you invest in cryptocurrency only what you are comfortable living without, at least temporarily.