Cryptocurrency is more popular today than ever. And if you look at the development of the industry, you can understand the people who invest their money and start trading. But, as elsewhere, no one is safe from mistakes and wrong decisions. And if some mistakes lead to only small financial losses, then some mistakes are worth a fortune. Any newbie wants to follow in the footsteps of Bob Woolgaris, Tony Weiss, or Peter Brandt. However, not all beginner crypto traders are capable of taking profits from the first attempts.
Crypto trading is an activity aimed at obtaining as a result of trading on specially designed exchanges. Any job requires the performer to have certain professional skills that can help in achieving the goal. In the case of trading any asset, this can include attentiveness and an analytical mind.
However, most novice traders think that they can quickly make a profit, with little or no effort. But in practice, things are very different.
Today we would like to introduce you to the main mistakes of crypto trading, which will make you think carefully before investing your first dollar in this simple pursuit of a dream. Trading must be approached with a cool head. But we have prepared a much more detailed list of spaces for you.
1. There is no experience in trading on stock exchanges
After a theoretical study of the basic aspects of trading, beginners often run into difficulties due to a lack of understanding of the technical part of trading. This requires a return to school, in which the key emphasis will be on practical training in order book use, pending trades, leveraged trading, trading strategy optimization, trader logging, and more. etc. Of course, any testing, skills development, as well as actions to study the functionality of the trading terminal must be performed exclusively on demo accounts. Almost everywhere, the structure of the interface and the set of options do not differ significantly.
In addition to working out technical issues, you should regularly repeat professional terminology, learn ticker symbols and consider security issues, paying attention to storing coins in cryptocurrency wallets.
2. There is no knowledge in the field of blockchain structure and the fundamental structure of digital currencies
Probably, many will be puzzled by a reasonable question – Why such knowledge for trading cryptocurrencies? Yes, the information is specialized but important. It is impossible to make successful transactions with exchange-traded assets, about which nothing is known. On classic platforms, experienced traders who trade stocks, metals, or, for example, currency pairs, always study financial instruments by performing rigorous fundamental analysis. For crypto assets, a similar scheme must be used, which must also include correct technical analysis. Advice! Before trading cryptocurrencies, where real funds are used, you must have a minimum of general information about digital coins – blockchain, history of appearance, features, demand, etc. Then you should choose several (5-10 variants) of the instruments for which the main number of deals will be concluded, and study them in more depth!
3. Frivolous attitude towards defensive techniques
All sectors of the cryptocurrency sphere have a lot of specific features, a frivolous attitude towards which will certainly entail losses or loss of savings. Absent-minded and reckless users forever lose crypto coins due to a simple loss of a secret key, illiterate passwords on accounts of cryptocurrency exchanges, inattention during transactions, etc. Neglecting safety always has dire consequences.
4. “Disgust” to altcoins
The emergence of bitcoin practically made all cryptocurrencies a kind of mainstream, where the BTC coin took a confident position as the leader in the cryptographic money market. However, subsequently, new blockchain projects with virtual currencies with more advanced characteristics began to be actively created. For example, transactions with bitcoin are favorably distinguished by their high speed of execution, and it is famous for smart contracts (smart contracts) and a unique blockchain concept. It is impractical and a bit silly to get hung up on bitcoin today. New blockchain technologies exist and are emerging that can offer the opportunity for perspective.
5. Ignoring the specifics of different virtual currencies
Any cryptographic coin is characterized by a set of unique fundamental features, for example, the demand for an altcoin, and the nuances of value transfer and storage in crypto wallets. If you do not conduct a preliminary analysis of the crypto-asset, then it is not difficult to someday run into stablecoins or app coins and then wait a long time for the required reversal of the quotes of the purchased coins. Recommendation! You should always allocate no more than 15-20 decentralized currencies that are supposed to be used in trading. Of these, 3-5-7 coins need to be selected for regular use in trade and exchange operations. Of course, all these exchange instruments should certainly be subjected to the most thorough analysis!
