In fact there are much more…
The rise of cryptocurrencies has created a new generation of casual traders. These beginners should be especially wary about making following mistakes.
Falling in Love With your Bags
One of the common mistake in crypto trading is to fall in love with a coin. You may like the project vision, interact with the community or chat with the professional and accessible team on the Telegram channel. This is the sign that your emotions are taking over. You must be ready to leave the boat if something goes bad. There’s no disgrace in that, in trading, your personal interest comes first.
Not Having a Trading Strategy
One of the worst things you can do as a trader is to trade without a strategy. It’s like driving your car with no destination. Experienced traders always have a plan when getting into trading, they know the maximum loss they are willing to take. When you begin in the trading, in general you don’t have a plan, you sell as soon the price drop losing a bit of your starting capital and so on. Which lead you to a big loss. You do need a fixed plan and define your entry point. Another big sign you don’t have a plan is “Where is your stop loss ?”
If you don’t set up a stop loss to your strategy it means you don’t have a plan. Never forget to add a stop loss when you’re building your strategy.
Trusting Shillers Without Doing Your Own Research
Some of your favorites influencers can genuinely recommend solid projects or coins on Twitter or Telegram but don’t forget that sometimes these shills are paid. Always do your own research. If it sounds too good to be true, it probably is.
Compulsive Trading, Lack of Patience
“The stock market is a device for transferring money from the impatient to the patient.” This quote from Warren Buffet is perfectly relevant for crypto trading. Don’t rush your decisions, self-control is important. Never chase pumps through FOMO (Fear of missing out).
Overconfidence and Reckless Trading
A bullrun or a succession of winning trades can bring a period of euphoria. We then may feel invulnerable and we could think that all of our future trades will be successful. It is necessary to question ourselves at each trade and avoid a state of overconfidence. Don’t jump “at any cost” to the first coin without doing your own research.
Making mistakes is a part of the learning process in general. But beginners traders can get wiped out quickly where a pro trader have some capacity and capability to bounce back.
Happy Trading!
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