Common Crypto Mistakes To Avoid in Trading and Investing
Crypto is notorious for its highly volatile market. In this environment mistakes are inevitable, and very experienced investors still find themselves making mistakes. If you have decided to invest, it is nigh-on inevitable you will make some. That said, forewarned is forearmed. So here are some common Crypto mistakes which you should be aware of.
Crypto Mistake #1 – Over-trading
In this fast-moving environment, it can be tempting to think you need to keep making moves. It is often a mistake to make too many moves. Sometimes it is better to sit on your hands and patiently wait for your planned opportunities to arise.
Always remember that “hodling” is often (but not always) the optimal strategy for inexperienced traders
Crypto Mistake #2 – Moving from one “bag” to another
Likewise, it will always be the case that someone else’s coin is pumping fast. The temptation to over-trade can arise here. Moreover, in moving from one “bag” to another you can sometimes find that the coin you just sold begins to increase in value.
Crypto Mistake #3 – Not having a plan
With so much volatility and so many projects to choose from, it is impossible to be fully-briefed about all possibilities. This can lead to trading without a plan. It is always better to have a plan. But, given the unpredictability of Crypto, always have a Plan B!
Crypto Mistake #4 – Being unaware of your own emotions
Investing in Crypto will inevitably have its emotional moments, whether that is fear, greed, or impatience. Know that these emotions can arise and know how you will deal with them.
As well as being unaware, emotionally led investing or loss chasing behavior can also be a big risk. Sometimes taking a break or getting some advice if things really start to take their toll emotionally is the best option too.
Crypto Mistake #5 – Buying high, selling low
Especially if you don’t have a plan or are being ruled by emotions, you can make the common mistakes of buying high and then selling low.
Crypto Mistake #6 – Be wary of echo chambers
Social media and advice from friends can be useful. But be aware that Crypto is also a very tribal space, be aware that you might have found yourself in an echo chamber in which you only hear one side of the story for this or that project.
Crypto Mistake #7 – Not knowing your limitations
A variety of ways to invest in Crypto exist. These include trading on leverage, which can be very profitable. But it is also high risk and very difficult to get right. Unless you are a tried and tested investor you might be best off sticking to buying spot. This means buying the coin itself. Whilst losses are still possible, losses and profits can only be realized when you actually sell that coin. Trading on leverage works very differently.
Crypto Mistake #8 – Using a poor Exchange
There are hundreds of them out there and it is hard to know where to go and what experience you’ll get before you start using them. Unless you refer to our guides on the best Crypto Exchanges that is. At Complete Crypto we’ve reviewed and trialed Crypto Exchanges so you can make the most informed choice about where to start your Crypto journey…