These days, cryptocurrency trading has taken the world by a storm. More and more people are trying their luck in the crypto market to cash in on the trend. There are some traders who are successful in making it big, but it usually takes them a long while and also requires a lot of patience. The simple fact is that even though it may look easy and simple, cryptocurrency trading comes with inherent risks that every trader has to face. Whether you are a seasoned or newbie crypto trader, you should never get ahead of yourself. The crypto market is very volatile and drastic price shifts can take place at any time.
Just when you think you have everything figure out, any sudden factors can lead to massive shifts in the market. To make things worse, traders often end up panicking and make some truly horrible decisions that can drive them away from their crypto goals. To make sure this doesn’t happen to you, here are some unforgivable mistakes you should avoid:
- Failing to do your homework
The problem with most of the cryptocurrency traders is that in their eagerness to make it big, they just jump headfirst into the market and start buying and selling. They don’t bother learning any of the crucial details and strategies that can make a difference in outcomes. Make sure you don’t make this mistake and have some basic understanding of how cryptocurrency work before you step in. You should also understand how exchanges and brokers work so you would know what takes place behind the scenes.
- Not coming up with a plan
Don’t be too hasty when it comes to trading in the crypto market. First, you need to figure out how long you plan on trading. Generally, there are two options to choose from; you either have to have a short-term plan or a long-term plan. Depending on the time frame you opt for, you can come up with a plan or what you should and shouldn’t do. This way, it is easier for you to decide if you want to HODL your crypto investments or you want to let go at any given time.
- Failing to keep track
One of the numerous things you will learn when it comes to crypto trading is to keep track of every move you are making. You need to remember or make a record of any information that’s related to your trading activities. If you are new in the market, it is a given that you will make mistakes. Keeping track of your mistakes and learning from them can actually make a big difference in how quickly you achieve your goals.
- Not being able to identify scams
Like every other market, the crypto market is also riddled with scams. In fact, they are more common in this market because it is a new one and not many people have knowledge about how it works. Therefore, it is immensely easy for anyone to fool others by taking advantage of their naiveté. You have to learn to not get caught up in any schemes that sound too good to be true. Some people sign up with a cryptocurrency broker offering lots of cryptocurrencies, minimal deposit requirements and low fees, only to find out later that they are unregulated. Always check a cryptocurrency broker thoroughly before you fall for any of their offerings.
- You get swayed quickly
It is a fact that cryptocurrencies are quite volatile and so they are subject to price fluctuations and movements every now and then. However, sometimes, these shifts are planned rather carefully. Shilling is a common occurrence on social media sites and in forums for generating hype about a cryptocurrency and forcing traders to buy and sell cryptocurrencies. This causes many people to suffer from FOMO (Fear of missing out) and they allow their emotions to get the best of them. But, letting your emotions drive you into making decisions is a big mistake. You should know better and not jump the gun before studying the market.
- Not securing your account keys
Another common yet unforgivable mistake that newbie traders commit is not securing their keys properly. It is crucial for every crypto trader to be familiar with their keys and find a secure wallet where they can be stored. When it comes to choosing a crypto wallet, you will find a ton of options at your disposal, but the most secure ones are usually kept on hardware because these cannot be stolen over the internet.
- Thinking you will get rich easily
Most people learned about the existence of cryptocurrencies when Bitcoin hit its peak in 2017 and people made huge fortunes. Therefore, they enter the crypto market with the mindset that getting rich in this market is incredibly easy. This is only a misconception and what happen with Bitcoin was a rarity. This doesn’t happen every time and people don’t just get rich easily, whether it is through crypto trading or forex trading. The ones who do make it big through this form of trading are those who are patient, have proper strategies in place, develop backup plans and also implement them when the time is right.
- Stopping the learning process
Just like the stock market, getting stared with crypto trading is not that difficult, but it takes a lot of time and planning to learn the nitty-gritty. There is no harm in being ambitious when it comes to your goals, but you need to be methodological and practical as well. This means you don’t just stop the learning process once you start making some profits. Continue studying the trends and the market changes and never go for any shortcuts. You will find plenty of resources online that can teach you more about the crypto market and trading in general.
Learning to avoid these mistakes can make it possible for you to achieve your crypto trading goals easily and not damage your chances of achieving success.