There are many successful traders out there, but there are also individuals who start trading cryptocurrency but find it hard to achieve success. There are various reasons why someone could not make it, trading cryptocurrency.
Whether it is a wrong decision taken by the trader or a trap that he fell into, it causes stress and dissatisfaction. So, as a new investor, you must always have a game plan, avoid mistakes as much as possible, and, most importantly, avoid falling into traps.
Let’s take a look at 3 things you should avoid while trading cryptocurrency.
-
Don’t get too hyped up
Just because everyone jumps into the bandwagon, it does not mean that you have to jump too. Especially starters should avoid getting all caught up in the hype. In 2017 cryptocurrency market experienced sharp gains, rising from $17.7 billion to 603.7 billion. In 2018 the rise continued, and the market value reached the highest point ever of 835.5 billion on January 7.
There was hype for cryptocurrencies; that’s why these gains took place. Searchin “Bitcoin” and “Crypto” terms in Google increased significantly.
But, afterward, in 2018, the market started going downward, reaching as low as $276.1 billion. Therefore, traders who invested early did well, but some others who bought at the top experienced losses. So, it is essential to conduct researches to make a proper plan when trading and not be driven by your emotions because it could lead to bad decisions.
-
Pay attention to the security of your coins
You started the trading journey to make money, and you don’t want to lose the profits in any way. Blockchain is very secure, so it is impossible to steal cryptocurrency by hacking a blockchain network directly. However, if private keys or access to your wallet is not safe, your security is lacking. Cryptocurrency relies on a password system of private keys. So, the best way to secure your password is by using a hard wallet.
Hackers are always looking for opportunities. They are actively trying to get into people’s computers. They can use various methods to get into your computer and steal coins. Remote access to your computer can give them the potential to access your wallet. There are also risks when using cryptocurrency exchanges, so make sure you pick a trustworthy exchange. Remember what happened to Mt.Gox.
-
Don’t be influenced by FUD
“Fear, uncertainty and doubt” is what stands for the FUD. Speaking about bitcoin, Warren Buffet said: “If you buy something like bitcoin or some cryptocurrency, you don’t have anything that is producing anything,” and “You’re just hoping the next guy pays more.”
Basically, what Buffet said is that bitcoin is not an investment, and you have to be very lucky to make a profit. Many times famous individuals talk about cryptocurrencies causing the market to move. But their word cannot be taken as the last and ultimate one.
They can be financial experts, but they cannot always be right. So, study cryptocurrencies yourself, study the market and make decisions based on your knowledge.
Conclusion
Obviously, there are more than three things you should avoid while trading cryptocurrencies. But, these three that we elaborated above will help you. Trading cryptocurrencies might not be easy since they are a new asset, and they are volatile.
The most important thing is to get knowledgeable and to know what you are doing. Search and check helpful sites that will shape you toward your new journey. Check the 5 coins to 5 million list to see when is a good time to buy bitcoin.
In the end, it’s impossible not to make mistakes, but be sure you make as few as possible. And be sure you learn from them.
Video – Cryptocurrencies
Interesting related article: “What is a Cryptocurrency Wallet?“