The Crypto market is volatile, and making mistakes here can make you face huge losses. It is the market that doesn’t even forgive the honest mistakes of traders. Traders should remember the mantra of never making a mistake to avoid blunders in their trading journey. Suppose a trader directly jumps into the market without having proper knowledge of crypto trading and ends up making a plethora of mistakes. In that case, you won’t get back to trade cryptocurrencies again for sure. Either fortune is made or lost in crypto investing and trading. Those investors who are dedicated to make a fortune and understand the mindset mathematical game can earn success, while others may end up losing all their money.
Some crypto experts and wealthiest people worldwide are hedge traders and have expertise in making the best trading strategies to minimize their losses. However, the best way to minimize your losses is by learning from other’s mistakes. Remember, learning from your mistakes will make you wise, but learning from other traders’ mistakes is intelligence.
You can become clever and intelligent at the same time by learning the most common mistakes that traders make in the crypto world. You can trade bitcoin after checking the Primary Reason to Invest in Bitcoin
Trading with real money instead of paper trading
Like all other skills, trading is also a skill that only dedicated traders with patience can master. Unfortunately, trading requires a lot of patience and endless practice. There are some specific rules to trade cryptocurrencies, and one of the best rules is through paper trading instead of using real money. For some traders who only focus on earning profits, paper trading may be boring, but it is one of the most important aspects of cryptocurrency trading.
Many traders enter the crypto market with a gambler mindset, and without knowing the rules and using the strategies, they end up trading real money and often face huge losses. The Crypto market isn’t going anywhere, but it is crucial to prepare yourself and gain the patience to trade for you. It is best to start with paper trading, where you don’t risk losing anything.
I do not have a risk management plan.
Stop losses are the central part of the risk management plan. Not every trader trades by considering all the rules, but having stop losses can help you minimize the losses while trading. Even if you are confident enough to trade accurately, it is best to have a stop loss. Unfortunately, many traders do not use stop-loss because they couldn’t make a mistake because of their ego. However, reliable crypto exchanges provide the feature of stop loss to traders.
I am not considering the profit/loss percentage.
Another common mistake that most traders make is not considering the profit and loss as a percentage. It is essential not to consider profit/loss as absolute gain but to consider the percentage of loss or gain to help you estimate your success and mistakes. Traders should make this a habit to see the profit or loss percentage to check their improvement while trading cryptocurrencies.
Paying high trading fees
Traders have to find the right trading platform to trade cryptocurrencies. Not all trading platforms are reliable, and they may vary in multiple things, including security, trading fees, and liquidity. Some exchanges can have high trading fees, and some beginners end up paying high fees, which eat a significant portion of your profits. Finding a crypto exchange or trading platform with low trading fees and high liquidity and trading volume is best.
I am only doing technical analysis.
Many beginners are unaware of trading cryptocurrencies. Make mistakes choosing the extremely popular cryptocurrency and starting trading it. There are chances that you can earn profits but not for a long time. It is said because many traders only do technical analysis and look at the charts to estimate the future price movements. Still, at the same time, it is crucial to do fundamental analysis as well. Fundamental analysis helps traders choose the right cryptocurrency to trade, consider its future outlook, know about the management team and learn about the token economy.