4 crypto mistakes that can have disastrous consequences
Cryptocurrencies are more popular than ever today, with everyone from Aunt Martha to your tech-savvy neighbour wanting in on the action. The promise of huge profits and freedom from government control has lured people into investing in cryptocurrencies without properly understanding how they work. Unfortunately, this can lead to some disastrous consequences.
In this post, we’ll take a look at some of the most common crypto mistakes and what you can do to avoid them.
Trading Without a Trading Journal
Cryptocurrency is a volatile market. The ups and downs of the cryptocurrency market can be significant, but there are ways to mitigate risk in trading by using a trading journal. A trading journal is an account that records all trades made during the day for future analysis, with each trade accompanied by its:
- Type of trade (buy or sell)
- Quantity traded (in the number of tokens)
- Price per token at the time of sale or purchase
- Performance after the sale or purchase
This provides traders with invaluable information about what worked in their favor so they can replicate it in future trades. It also helps them identify which strategy isn’t working out to change course before any major losses occur.
Not Starting With Paper Trading
Cryptocurrencies are a new and exciting way to invest, but like with any investment, there are risks involved. One of the biggest mistakes when getting into crypto is not starting with paper trading.
As volatile as the cryptocurrency market is, it’s easy to make costly mistakes if you’re not experienced. You can learn the ropes by paper trading without risking any real money. You’ll also get a sense of how the market moves and which coins are worth investing in. Without doing this step, you could end up losing a lot of money in short order. So don’t skip paper trading – it could save you from big losses down the road.
Acting on Unclear Patterns and Indicators
Unclear patterns can be found in many places. They are often hard to spot and even harder to predict with accuracy, but they exist. Trading crypto is no different. If you see an unclear pattern while trading crypto, it’s best to step back and wait before acting on the information you have at hand. Acting too soon could lead to disastrous consequences for your capital investment.
A classic example of this was from 2017 when Bitcoin was at its all-time high of nearly $20,000 per coin. There were rumours that China would ban cryptocurrency trading platforms, which caused a significant dip in value for bitcoin throughout December 2017 — but these rumours turned out not to be true after all.
Following the Trend
Cryptocurrency trading is popular these days, and everyone is getting in on the action, hoping to make a quick buck. While there’s potential for profits to be made, it’s also important to remember that crypto trading is a risky business. Following trends can have disastrous consequences, so it’s important to do your research before investing any money into this volatile market.
Keep in mind that cryptocurrency prices can go up or down at any time, so don’t invest more than you’re willing to lose. Do your due diligence, and you may find yourself reaping the rewards of this exciting new investment opportunity.
The cryptocurrency market is volatile and risky, but it offers huge potential for those willing to take the leap. To avoid making these common mistakes, you should do your research before trading or investing in cryptocurrencies. If you want help deciding which currencies to trade with, visit bitcoin buyer