Negosentro.com | Common Mistakes One Should Avoid When Investing in Crypto | Clearly, investing in the crypto at the right time does not take luck only but more importantly, it also required insights and precision. Only those who have improved their investment methodologies day by day, one mistake after another, consistently can crush the masses.
Here is a list of common mistakes one should avoid when one invests in a volatile crypto world:
You don’t understand the technology of it
If you don’t understand the technology of investing crypto then my friend the road will be risky for you. Until you can judge for yourself, you will miss out on big opportunities.
Many investors, mainly beginners, want to make more and more trades a day and this is dangerous. You will end up losing more. See the reason behind this is simple, many of them lose from fees or because some of them make bad trades and then they trade more to recover their losses. And trading too much leads to poor decision making. Overtrading also increases your tax liabilities.
Don’t think cryptocurrencies as share
Yes, cryptocurrencies are not shared like stocks and you will not have ownership in the company and receive no dividends. If a company issues a cryptocurrency, then it is possible for the company to profit or get acquired but there will be no benefit to you. A company coin can drop, even the company is doing well.
You chase cheap coins
Don’t dream of limbo’s and private jets and start chasing cheap coins this is a common trap. Lots of uneducated investors buy low priced cryptocurrencies because they think that there is a higher chance of big returns. There are lots of other factors that affect the coin price so don’t go for the cheaper coins.
Don’t diversify your portfolio
While it may be tempting but don’t put all your eggs in one basket. Every experienced investor knows how to protect his/her assets. They protect his/her assets by investing in multiple places. It is a good idea to own more than one cryptocurrency.
Don’t research poorly
The process is time-consuming but the more you research, the better you’ll become at it. You can check on various announcement thread on BitcoinTalk.org websites. Also check on the economics of the coin, trading volume, price history and total versus circulating supply and cross-reference opinions from the industry experts.
You overly Invest or Don’t HOLD hard Enough
Lots of the new investors are impatient and because of this, they cut down their losses early of emotions. This cryptocurrency market is made of cycles, where prices rise and fall drastically. If you buy high, then you will have to wait for an entirely new market cycle to end up with profits. That could take you over a year of waiting. For that reason, never, ever risk the money you can’t afford to lose!
Don’t leave All your coins on exchanges
Seriously, if you don’t control your keys, then you don’t control your coins because the exchange is huge targets for hackers and are always at risk. When you leave coins on the exchange then you are trusting the exchange’s security measures not your own.
You don’t own a hardware wallet
If you invest frequently, then hardware wallets are a smart investment for you. This makes security an easier task. When they are disconnected from the internet then there is only one way that hackers can obtain your funds, they have to steal your physical device and also know the passphrase to access it.
Don’t fall for the media propaganda
Some of the major news sites will sometimes release very negative, and often, threatening news. These headlines are the foundation of propaganda. Lots of these news articles, Instagram stories are intended to generate clicks, controversies, and sometimes even FUD.
Understand the market dynamics
You should know that Bitcoin only makes up about 50%of the market’s liquidity and there are thousands of altcoins, and they work in correlation with Bitcoin. If you don’t understand these correlations then it can lead to poor and costly investment decisions. People who make money trading crypto understand these dynamics very well.
Learn to read a Trading chart with fundamentals
Once you understand the basic dynamics such as supply and demand, it will help you to start learning how to read trading charts which are also known as technical analysis. You will also learn how to relate the fundamentals of the projects with these charts. Technical analysis helps you better to predict the future by analyzing historical data. You’ll gain a feel for when markets are about to turn, or if your assets aren’t priced properly.
Every single one could be trading crypto right now, which makes not trading one of the bigger mistakes every crypto trader should avoid. To know more about which cryptocurrency to invest you can go through the Bitmex trading signal group.