Some of the Crypto Trading Mistakes and How the Mistakes Can be Avoided
In the crypto space, uncertainties are paramount and anything can happen at any time. Because of this uncertainties, a lot of traders and investors are bound to make mistakes. Before proceeding, it is important to know that this is not financial advise and it is important to always do your own research before making any trading/investment decisions. With that out of the way, Let's take for instance, the price of BTC is heading in a bearish direction from its previous high, falling from 62K down to 35k... When this happens, a lot of traders/investors would Just Hold and Wait-
Which means that if they bought BTC at its high of 62k, they would just hold the BTC and wait for the BTC price to hit their entry price to either exit the market or wait for another increase in price to take profit. The reason they would just hold is because they wouldn’t want to sell BTC at a loss because BTC is the leading cryptocurrency and has shown time and time again that it always recovers.
Holding and waiting isn't a bad idea, however, there is a much better way to reduce losses and stand a higher chance to make even more profit - which is to Dollar Cost Average and Buy More at Lower Prices - if they bought BTC some days ago at USDT 62k and there is a sudden dump in price, dollar cost averaging and continuing to buy more BTC at the lower prices would put the trader/investor in a better position to make more profit. Why this is a good idea is because BTC will always recover and when it does, the trader/investor would be in profit before the price of BTC even hit 62k.
Some common crypto trading mistakes
I’m pretty sure every cryptocurrency trader has made a couple of mistakes here and there when trading. However, what separates a good trader and an amateur trader is the ability to learn from mistakes and become better. For me, I have made a couple of mistakes when trading cryptocurrencies and have learnt… some of the mistakes I have made when trading cryptocurrencies are;
- Not using stop loss when venturing into a risky trade which resulted to big loss
- Trading with all the capital all at once
- Trying to be too smart for the market and investing all my capital on a single trade
- Not paying attention to sentimental analysis because sentiments can affect the price of any cryptocurrency
- Not taking profit when immediately and losing the profit to sudden dump
How the trading mistakes can be avoided
- Making use of stop loss especially on low cap coins
- Always take profit and not be greedy
- Always follow social media channels, read news and blogs for any sentiments that may affect price
- Only invest with risk capital
- Never trade with all the capital on a single trade
Certainties are important in the crypto space and anything can happen at any time. Due to this uncertainty, many traders and investors make mistakes. It is good to hold and wait, but there is a better way to minimize losses and make more profits.
These are very true mistakes that even I at one point of my life I made and trust me I was really punished for that greatly. One of it I remember I made was not using stop loss. I eventually lost my money because of that