Just like in any other industry, being a beginner means you will make some mistakes. Mistakes make life so much more complicated, and then you get a feeling that you will never stop being a beginner.
The same happens in the cryptocurrency sphere – a lot of newbies make mistakes that are inherent only to beginners. Of course, it’s better to learn from other people’s mistakes. But how can we make sure that there are fewer of our own?
First and foremost, choose a good Bitcoin OTC broker you can trust. JingStock is a service to check out. This platform is legit, legal, secure, and don’t even get us started on their commissions – they are lower than ever.
Let’s take a look at the most common issues cryptocurrency (and Bitcoin in particular) trading beginners have and check out some tips on how to avoid or fix them.
Relying on big profits and getting them quickly
One of the most dreadful mistakes a newbie can make is to leap into the cryptocurrency world without any preliminary research and risk and potential income assessment. Tempted to make quick and high profits, many lose their money.
Buying at the last moment of growth
Newbies often buy cryptocurrency after it has already been going up for too much time – and the trader is losing money that way.
Why this happens: cryptocurrency prices change chaotically. The majority of cases when the value of currency and cryptocurrency goes 1% up ends with it going back down again. Experienced traders enter the game with every such move. They hope that profits from one trend trade will cover losses from 7 unsuccessful ones.
Newbies miss the beginning of the trend: they are afraid of a pullback and wait for favorable conditions. But at the end of the trend, they buy an asset and create hysteria – price fluctuations inside the bar with a new maximum.
The big players are waiting for hysteria to start. At this point, they sell their assets to greedy newbies and exit the market. Traders who bought an asset from professionals incur losses.
Risking more capital than you can afford to lose
This one is the biggest mistake a trader can make. A sober assessment of your financial capabilities and determining the amount of money the loss of, which, in the worst-case scenario, will not lead you to bankruptcy, is the key. And if at some point you find yourself trading above this mark, stop. It will mean that something is going wrong.
Trading is a very risky business, and if you invest more money than you can afford to lose, it will, in any case, affect your trading style: it will push you to rash decisions and huge financial losses.
Many novice traders in the foreign exchange market are slaves to this, but cryptocurrency trading has made this mistake even more widespread. The thing is that the volatility of cryptocurrencies significantly exceeds classic currency pairs.
It is the excitement and the thirst to earn more, coupled with modest trading experience, that makes crypto traders make another mistake – to trade too much.
Imagine the situation. You see, you’ll get a 20% profit if you take your money now. Will you be able to stop yourself? Or will you keep trading thinking that the price of the cryptocurrency is definitely gonna continue to grow?
Too many traders can’t just stop, And here the volatility of the cryptocurrency market often plays a cruel joke with them – the confident growth of the coin can almost instantly be replaced by an abrupt fall, turning 20% of profit into 0% or even causing losses.
Not keeping a physical copy of important data
Let us explain. We definitely don’t advise you to keep all the passwords in your Word document on your computer. This is not a physical copy.
We suggest that you write down all your passwords, security questions, answers, etc., print it out, and hide it somewhere safe. This way, if something happens to your computer, you can always restore everything.
The value of the cryptocurrency is constantly changing. This allows you to make money off fluctuations in the exchange rate. The question “How to trade bitcoins” is relevant in a special way. After all, the cryptocurrency is very volatile. If you play the cards you’re dealt right; the earnings will be huge. The risks are also great, but they are easily compensated for with a competitive attitude to the buying and selling process.