Common Mistakes Crypto Trader Make.
Hello friends, trust you're good...welcome to this space once again. I hope you enjoyed the last dish..smiles. it's good to be back in your faces with another Interesting post. Do well to read through and digest.
Today we will be looking at common mistakes traders make that costs them. The purpose of making this post is to learn and get better ,be you a novice or pro. Let's get into it right away.
Mistakes they say are inevitable but trust me when it comes to this space there are some mistakes that can be avoided totally when you have knowledge. As a trader or potential trader, you need to go for knowledge before embarking on a trading mission.
The reason for the above is not far fetched, and that's because money is involved. You wouldn't want to throw away your hard earned money all in the same of trading.
So in this post I've put together some common mistakes traders make and by going through them, you can safeguard yourself against them. Let check out the common mistakes.
- Starting out trading with Real money
I know know exactly how it feels when you see people hit real good profit in trading with their result obvious for all to see. I know the temptations that immediately comes to overwhelm you to jump at it as well.
To become good at trading takes time and that because you need to devout yourself to learning and strategies that works and this can only be effective via Paper/Demo trading. I mean trading with an unreal account stacked up with unrealistic fund to enter what looks exactly like a live market.
Here you can learn and make all your mistakes without losing a dime. Because it not a real account where real money goes into the financial or better still, crypto market.
- Ignoring Risk management
This is another mistake most traders make, especially novice. They get all carried away with the prospect from trade that they totally ignore the obvious risk in the market. Forgetting the fact that the market itself is a two edged sword which can favour or go against you.
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I would like to emphasize on stop loss which is the center focus of risk management. You need to set your stop loss for each trade. Stop loss put limit to your loss.
By adding stop loss to your trade, you're only expressing how much you can afford to lose if the market go against you which is bound to happen anyways.
- Using expensive brokers
Don't forget, your ultimate motive for trading the market is to make profit. If that's the case then, you need to do all to can to make and protect the profit from unnecessary charges/fee that might want to eat it up.
There are some brokers whose fee are quite expensive that when you even make profit from a trade, it eats into it leaving you with just little only to discover that you're actually working for them and not for yourself...lols.
It funny but true. So do not make the mistake of using a broker just because you've heard so much about them. Check if their service fee favours you. The market is just to risky to leave so much on the table in the name of brokerage fee.
- Ignoring Fundamental Analysis.
I believe we have discussed fundamental analysis in one of my previous post. Well if you haven't seen that, go look it up. Fundamental analysis is key. Jumping into the market to trade any tom, dick and harry without your background research about them can be your undoing.
Technical Analysis is good, trust me but I've come to discover that it can't be a stand alone tool to get the best from the market. A coin can be doing perfectly well now but one fundamental factor like rumour or news can make it dump like crazy... completely blowing up your account or leaving you as a bag holder with barely nothing.
The bottom line is whatever coin you would like to trade, do well to research about it. Fundamental Analysis reveals underlying information about a coin which technical analysis will never reveal.
- No trading plan
Planning is a vital part of life and it cut across ever aspect of life be it business, career, relationship and even in trading crypto. You don't approach the market without a trading plan. If you do so the market will end up dictating your activities for you.
For example, if you don't have an entry and exit strategy, how much you would like to make from each trade moderately, how much you can afford to loss from a trade, how many trade you can go a day and the likes, you might just be planning your final exit out of the the market.
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Having all of these at the back of your mind will guide you against the strong sentiments that ravages the market per second. In a nutshell, do not approach the market unprepared without a plan.
Not planning is a plan in itself, because you're planning to fail.
- Early use of Margin.
Trust me, a little profit here and there could tempt you into doing this. Don't get carried away when you start making some profit and then the next thing that come to mind is Margin trading for bigger profit. Avoid this especially as a newbie.
Margin trading simply means borrowing from your broker or exchange (as the case may be) to trade. This can be very risky as you could end up in huge loss and debt if the trade goes against you.
I know it tempting to venture into it as the reward can be huge if it goes North but at the same time it's highly risky if you haven't studied or understand how it works. At least stay so long and active in the market to gain much experience that can warrant such action.
Here we go guys am sure you must have been guilty of some of the above mentioned points. It not too late to retrace your step and step up your trading game. Every professional was once a novice. Interestingly, professional still makes mistakes in trading but we get better as we engage the market each and every time.
Feel free to share with me your thought as usual in the comment section. I would be more than ready to go through them and do not forget ways DYOR!. Thanks for your time. Gracias!
Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.
Regards
@lhorgic♥️
https://twitter.com/lhorgic1/status/1687783739768639488?s=20
Good review of the mistakes made by the beginner trader.
But I disagree with the first argument, that is, using real money. '
When he uses a demo account, the same thing does not mean because of the absence of psychology that occurs.
And the psychology of trading is important in the trading method, and one of controlling it is without emotion when our money is lost in front of the real eye that we can stop.
I love your constructive argument with the first point. Well I think I get your point.
Doing a demo trade is just a way of exposing them to the market. This at least to gives them a foretaste and help them learn without loosing.
...the goal is actually to reduce their level of loss when the eventually go live and this is especially for the novice.
Your point is still valid and I appreciate it. It sure works for many out there with you inclusive. Thanks for dropping by ♥️
Dear @lhorgic ,
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This is a well written post, however it would be best if you indicate where your concluding words begin from
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