Were you unable to book a profit in your last crypto trading session? Well, if you did and you are unable to find out what wrong step you took, then this is where you can relate to some points and find out if you made a beginner’s mistake. Cryptocurrency trading is one of the fastest-growing trading arena in the world. The cryptocurrency trading market has reached an evaluation of over $1.20 trillion.
It is not much as compared to the stock exchange but the fact that cryptocurrency trading has reached this milestone in such a less time is self-explanatory of its affinity with the people. You can trade cryptocurrency and earn money 24/7 across the globe and that too without any central authority to control the trades. It promotes decentralization and also the crypto projects that are powered by these cryptocurrencies.
So, if you are a newbie and wish to learn crypto trading, then you will also require knowledge of what common mistakes to avoid. Being a beginner in the cryptocurrency trading market can put you at risk of losing a lot of money because of some mistakes. We have prepared a list of common mistakes that new investors generally make when they just start trading cryptocurrency.
If you want to pursue cryptocurrency trading, there are multiple cryptocurrency trading classes and certifications that can help you avoid these mistakes. Being a lone learner, you will have to spend more time learning to avoid these mistakes as compared to when you learn cryptocurrency trading through a course. So, you can decide between wanting a cryptocurrency trading course after you learn about the common investor mistakes in the beginning.
Contents
Trading Costs on Exchanges
As a beginner, a lot of times, people tend to forget that there are trading costs involved with the usage of exchange to make the trades. This is because the exchange platforms also have to make some margins on each trade you make. Now, if you are doing large trades, then the trading charges are nominal as compared to the profits that you have earned. But when you keep making small trades without checking the trading charges, then you are cutting into the profits you make and eventually it will start turning into an overall loss. When you start to learn crypto trading, it is one of the first things that you will be taught in a cryptocurrency trading course.
Leveraging
Beginners should not at all take a step into position trading or leveraging on a cryptocurrency exchange platform. It is a feature for people who have considerable experience in the cryptocurrency trading market. Leveraging offers a chance at multiplying your profits by a ratio but when you suffer losses, they are as huge too. In case you make a large margin call and your position does not seem to be profitable, you can incur losses that may take away all your investment at once.
So, if you wish to enter the positions trading arena, it is best that you learn crypto trading and take proper cryptocurrency trading classes. Moreover, leveraging is something that you can only understand if you have a considerable experience in the market. With time, as you will be able to understand the movement of currencies in the market, you will automatically be able to make use of leveraging.
No or Wrong Trading Strategy
While entering any kind of trading market, you require a proper trading strategy. There need to be some rules that you will follow while investing and taking the profits out. In case you do not have a proper strategy or the wrong one, you will never be able to decide when to invest the money and when the profits are enough to be taken out. For example, you can set a rule that you will invest in a currency only after certain parameters like moving average are showing more than 10 percent growth in a day.
Also, while taking the profits by selling the currency, you will make sure that you are not being greedy and sell your investment after the market has pumped up by a set percentage. This way, you will be able to do cryptocurrency trading with a clear mindset and not lose your money by just making a call at any time.
Lack Of Research
One of the rookie mistakes that a lot of people make while entering the cryptocurrency trading market is not doing proper research. Research means understanding the currencies that you think of investing in and checking if they have good performance in the market. A lot of times beginners make the calls based on the tips given by other investors. Many times such tips work but a considerable amount of times, they do not work and can make you incur a loss.
Sometimes, scammers also pump false information into the market and can alter your investment decisions if you have not done proper research on the market. So, it is best that you start to take proper cryptocurrency trading classes and do the research based on whatever knowledge you gained in such classes.
The Fear Of Mission Out
New investors have this habit of being excited about the market’s pumps and fall. A lot of times, they invest in a cryptocurrency just because a lot of people they know have already invested in it and made profits out of the currency. Well, it may have worked for them but there is no guarantee that you will also get the profit. Most of the time, such currencies run on a bubble that is created solely because of the investments that came out of nowhere all at once.
Whales do it a lot of time that they suddenly purchase a considerable quantity of currency to increase the price. Rookies think that the currency is going to be profitable and start purchasing too. This is when FOMO kicks in and a lot of people make mistakes. After the prices go up, whales sell their investments and make a lot of profit leaving the new investors amidst chaos and loss.
Conclusion
We have talked about the most common mistakes that people make when they start cryptocurrency trading. In case you are also starting your career in the field of cryptocurrency trading, then these mistakes are the ones you need to avoid. Moreover, if you are learning cryptocurrency trading, then it is best that you take a proper cryptocurrency trading course to do it correctly. Such cryptocurrency trading classes can help you build a foundation and form the best strategy to do crypto trading. In short, if you are an investor, you will need to be careful of the cryptocurrency trading market in the beginning and learn with time.