Avoid the 5 common mistakes people make with Altcoin Trading
Most people new to altcoin trading make similar mistakes. I wonder if it is even possible to avoid them. Maybe they are a necessary learning step.
- No Patience
Successful trading requires lots of discipline. So many people want the quick money, but overnight success is often years in the making. To win against the market, you must first win against your own weaker self. Just because you have some money to invest and bored with TV, you should not put that money into the next best coin. Sometimes not trading is the most profitable strategy. Sometimes you should wait for the right moment to enter your trade a little longer. Sometimes you just need to hold longer to meet your target price.
- No Plan
stick to my fucking planWhile trading is a game of probabilities, luck it does not give long-term success. Good traders have a plan. A system of rules of what coins to consider, when to buy and sell, when to take profit, and when to cut the losses. This system is very personal and cannot be prescribed. This system is also not fixed. A good trader revises and tweaks is system to improve performance. Reflection of past trades is important.
- No Skills
Professional trader learn a lot of skills for technical, sentiment, and fundamental analysis. Google this! For crypto trading I think technical analysis is not as important as the other two. In contrast, in classical ForEx the technical analysis is the most prominent activity.
It also pays to have the technical skills to actually understand crypto currencies. Do you actually know what a hash function does? While I can do such analysis for you in my coin reviews, you should learn that yourself in the long-term.
- No Safety
Even a great trader can experience streaks of bad luck. However, such streaks must not destroy all the investment capital. This means you only invest small amounts, so losses can be gained back in the future. Risk management is actually the first thing traders must learn. Without that skill, you will be out of money sooner or later by pure chance.
- Just Hope
Keep the emotions out of trading. Hope for more profit or less loss makes you break your plan. Stick to your plan and stay rational. Unless you like gambling.
1, 2, 5 are very common. 3 and 4 are arguable. What are skills in a world which acts according to randomness. Of course skills can be those where you are good at identifying future stars etc. Technical analysis can also be a skill, but that is a highly debated method. With risk management the best decision would be to stay away from cryptocurrencies and go to the stock market, but the best risk management in crypto is to just find out about what you are investing in and invest the amount that you can loose. Just my two cents :)
well said!