krypto trading mistakes

 There were no traders in the history of trading who managed not to make mistakes at the very beginning. The good news is that you can learn from your mistakes, acknowledge them and analyze them. That is what experienced traders do, and what we will address in this post.

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Internet experts are not always experts

The fast-paced ecosystem of cryptocurrencies evolves very quickly. New protocols, new coins and new platforms with wider features pop up regularly, and you should keep up. For that, it’s important to follow different influencers, trading venues and blockchain companies on social media.

Yet, if you only listen to the online experts and don’t understand the product, you’re putting yourself at risk of losing money. Don’t blindly trust Twitter calls, Telegram signals and YouTube shills.

Be prepared to research the product yourself, read the coin’s whitepaper, check out the product’s KYC policy and don’t only consider the price. Look mainly at the more substantial figures, which are the market cap and the volume.

Overtrading doesn’t mean more gains

If you’re a newcomer, you probably think that the only way to profit is by having as many winning trades as possible.

However, it’s possible to lose more often than to win and still come out with the profit. The outcome depends on your risk-to-reward rations.

Moreover, it’s possible to generate a healthy return due to a few trades per week. If you set a goal for a fixed amount of trades, it might only lead for you to make a less optimal decision.

Plus, minuscule gains will also see an increasing amount of exchange fees.

Stop-losses placed too close to the initial buying price prevent gains

A stop-loss is a tool you use to execute a market buy or sell at a specific price. With that, you want to protect yourself against a heavy loss.

However, the most common mistake rookies make is that they place their stop-losses too close to the initial buying price.

Triggering stop-losses too early might prevent you from taking profit. How? Crypto markets are very volatile. After the decline in prices, they might suddenly go up.

Pump & dump schemers feed you false promises

The pump & dump schemers act in coordination, to manipulate the price of a coin. They massively increase the buying volume, which incentivises other traders buy into this investment, too.

Later, when the coin skyrockets, the crooks dump the coin, meaning, set sell orders in bulk.

A great deal of rookies experiments with pump & dump communities because those groups promise instant profits with zero effort.

The problem with those groups, though, is that their admins buy large amounts of assets before announcing it to the community and dump the coin to everyone’s surprise.

As a result, unsuspecting traders and bots get left with low-cost coins on their hands.

Don’t act on raw emotions

The basic rule for anyone who trades over a short term, which is typically the case with crypto markets, says that you should never involve your emotions.

It’s important to stay as much as possible in a “cold” state of mind and always apply proper risk management plans.

Why? In the middle of the trading process, especially when you chain several successful trades in a row, you get a sense of arrogance and self-confidence, which tunnels your vision and leads to the risks of future trades.

The takeaway from this piece

If there’s one thing you should learn from this post, is that patience is the key in crypto trading.

Do not let emotions get over yourself, avoid pump & dump schemers, take closer looks at stop-losses, avoid overtrading and mind all those Internet experts that proclaim that they have the monopoly on the truth.