The cryptocurrency market never forgives a single and honest mistake. Every crypto trader should remember this mantra to avoid mistakes while trading cryptocurrencies. Almost all beginners make several mistakes which sometimes turn into blunders that they end up losing all their money in the crypto market.
It would be best if you learned about all tips and mistakes and how to avoid them to avoid making mistakes like other beginner traders. Beginners who don’t learn about the market and don’t know how to analyze the market makes lots of mistakes in quite a short period, and the result is that they never get back again into cryptocurrency trading. Start trading with crypto trader app as it provides complete guidance to beginners about trading bitcoin.
Every new crypto trader must learn that learning from your mistakes makes you smart but learning from other traders’ mistakes is complete intelligence. Moving on, let us learn some crypto trading mistakes that most beginner traders make.
Trading with real money instead of paper trading
Trading cryptocurrencies is a skill and lots of patience as well as practice. It is said that practice makes a man perfect; it is the same in trading cryptocurrencies. It has some rules and strategies that must be implemented to make trading profitable. One rule of trading is making use of paper trading instead of starting with real money. Most beginners consider it a boring part, but it is an ideal aspect of crypto trading in reality.
New traders think of trading as gambling and end up trading with real money before acquiring all skills. They need to learn that the crypto market operates 24/7, and it isn’t going somewhere, so you must only start with real money when you have a complete understanding of the crypto market.
Avoid usage of stop-loss.
A trader must have risk management plans, and the most important part of manage risks is to set stop losses. The stop loss helps traders to minimize all the losses that are predictable to occur while trading. Traders must set stop losses even if they are confident regarding their trade. Most traders avoid using stop losses, and this is the big self-centered mistake that they make.
The crypto exchanges allow traders to use the feature of setting stop losses and to avoid all risks that may occur while trading. All traders must use the strategy of stop loss.
Not considering the percentage of profit/loss.
Another most common mistake that beginner traders opt for is not considering the percentage of profit/loss. If the profit or loss, they take absolute gain instead of considering it as percentage profit/loss. Traders must opt to see every trade as a percentage of profit/loss by knowing their improvement. Considering percentage will provide a clear picture of profits or losses that you make in every trade.
Only doing technical analysis.
Most crypto experts advise beginners to use technical analysis to analyze the situation or status of money shortly. What beginners do is that choose a specific cryptocurrency and start trading it. If you have good luck, it might be possible that you end up earning some good profits, but one day you’ll face losses if you don’t do technical analysis. Traders must avoid the mistake of only doing technical analysis and not doing fundamental analysis, which is quite necessary.
Paying high trading fees to platforms or brokers
Trading is done through trading platforms and crypto exchanges. Not all crypto exchanges and other trading platforms are genuine and reputable. You must choose the best platform in terms of accessibility, security, brokerage fees, and benefits. Most of the time, new traders who don’t have complete knowledge end up paying high brokerage fees to brokers, which may eat up a large portion of profits earned from trading.
Traders need to do complete homework while choosing the exchange and choose an exchange that charges fewer brokerage fees and offers high liquidity. In this way, you can save your money and can trade more.
Having no clear trading plans
Before you start with trading cryptocurrencies, you must have a clear trading plan describing your goals, the amount of capital that you want to invest, your entry and exit plans and the loss that, as a trader, you are willing to receive.